Hospitality sector rings in FY23 on positive note amid broad-based recovery

Against the backdrop of a strong, broad-based revival seen in the hospitality sector after three waves of the pandemic, over 400 delegates from India and abroad are expected to congregate for a two-day Hospitality industry’s annual conference starting from Wednesday.  

Business hotels, which saw a delayed recovery, are back stronger and sooner as big ticket conferences and meetings have resumed in a big way, said hotel industry executives. Five-star business hotels in metros across the country have seen occupancy reach 75-80 per cent in the last one month, said K B Kachru, vice president, Hotel Association of India (HAI)

Meanwhile, as vacationers head to the cooler climes to beat the summer heat, hotels are ready to rake in the mullah.   Hotels in popular hill stations are either already sold out for the peak summer season or commanding a very steep pricing premium.

“It looks like there is a renewed interest in the development in India which will lead to tourism growth and investment. There’s lot of attention now to tier two, tier three and tier four towns—that’s where the real growth is taking place,” said K.B Kachru, vice president, Hotel Association of India (HAI)   

This is the first time after a gap of three years that the annual conference —Hotel Industry Conference South Asia (HICSA), will be seeing an in-person participation of global CEOs from international hospitality chains.

The conference will also be a forum to highlight investment opportunities at some of the lesser known destinations, added Kachru.

“There’s a general sense of excitement,” said Manav Thadani, founder—Hotelivate, the consulting firm that hosts HICSA annually. 

The hotel sector ended calendar year 2021 with an India-wide occupancy of 42-45 per cent, up 10-13 percentage points (Y-o-Y), which resulted in a 24-27 per cent increase in RevPAR  (revenue per per available room) to ₹1,800 - ₹2,100, according to HVS-Anarock. 

The consulting firm expects this to improve to 66 per cent in 2022, which along with a 28 per cent increase in average room rate will push RevPAR to ₹3,731 during the year.  

Among other things, the hospitality sector is expected to get a thrust from the government’s large scale infrastructure development, including roads, railways, ports etc.

“We believe that travel will witness an impressive bounce back, and the sector will soon be able to put the pandemic’s destruction behind it,” stated Mandeep Singh Lamba, President –South Asia, HCS Anarock in HVS Anarock Industry Overview.

A recent Agoda survey reveals that travel optimism is back and Indians are ready to pack their bags and take off.  Though international travel may have been put on pause for a short while, close to 39 per cent of Indian travellers are expecting to travel to international destinations within 2022.