Hoteliers optimistic on current economic scenario, future prospects: Report

A significant number of Indian hoteliers have expressed optimism over the current economic scenario and future prospects, as occupancy rates have increased over the past six months, a report said on Wednesday.

Business sentiment among Indian hoteliers continues to remain strong, with nearly half (49 per cent) reporting an increase in average room rates, and an even higher number (55 per cent) said there has been an increase in occupancy rates over the past six months, the report titled Indian Accommodation Barometer 2023 by Booking.Com said.

The gradual return of international travellers, along with the opportunities presented by digitalisation and interest in sustainable travel, also add to this upbeat mood, it noted.

The report is based on a survey conducted between July 17 and August 25 via telephonic interviews. Around 250 executives and managers from the Indian travel accommodation sector (hotels and holiday rental providers) participated in the survey.

The report also found that hoteliers are eagerly awaiting inbound travel to return to normal, as Indian accommodation providers see international tourists as providing the most growth potential.

Around 88 per cent of respondents see attracting international tourists as one of the biggest business opportunities in 2024, it stated.

Attracting families (78 per cent), offering local experiences (72 per cent ), attracting more domestic travellers (72 per cent) and spiritual tourism (64 per cent) are the other opportunities that the Indian hoteliers are expecting going forward, the report revealed.

Food and beverages play an important role in the industry's profit margins, with 39 per cent of accommodation providers claiming that the segment makes a significant contribution to the business, it noted.

About 41 per cent of hoteliers said that featuring vegan or vegetarian food on their menu is becoming more important.

However, the Indian hospitality industry faces multiple challenges, with concerns over operating costs topped the list.

Respondents pointed out the cost of energy (74 per cent) and taxation (73 per cent) as the top two challenges.

These are followed by staffing costs, economic uncertainty and the cost of investments, the report found.

Accommodation providers said they are investing in different sustainability categories, of which energy efficiency tops the list (46 per cent), followed by waste reduction (45 per cent) and water preservation (26 per cent).

"This year has been a year of recovery and optimism for the Indian hotel and holiday rental operators. The positive outlook reported in the inaugural Indian Accommodation Barometer 2023 is a testament to this sector's resilience," Booking.com Country Manager for India, Sri Lanka, Maldives and Indonesia Santosh Kumar said.

It is encouraging to see a strategic shift towards sustainability, wherein accommodation providers are prioritising energy efficiency and waste reduction, paving the way for the evolving and conscious traveller, he added.