Tourist hub Goa elbows out Mumbai in average room rates of branded hotels

Goa sees eighth consecutive increase in both average room rate and revenue per available room

Goa has overtaken the financial hub — Mumbai — in average room rates of branded hotels. The tourist hub has seen the eighth consecutive increase in both the average room rate and the revenue per available room (RevPAR) until 2017-18 (FY18). These key performance indicators grew even in the years when major domestic hotel markets saw pressure.
 
The average room rate for branded hotels in Goa increased by 4 per cent in FY18 to Rs 7,844 per night, against a rate of Rs 7,740 in Mumbai, where growth was less than 2 per cent. Mumbai had been the leader in rates for five consecutive years until 2016-17 (FY17), according to a Hotelivate report released last month. The RevPAR for branded hotels in Goa also increased for the eighth consecutive year to Rs 5,652 per night in FY18. The RevPAR increased 5 per cent over FY17.
 
RevPAR is the real measure of revenue and is derived by multiplying the average rate by the per cent occupancy. Mumbai is ahead in RevPAR because of a stronger occupancy level of 76 per cent, compared to 72 per cent for Goa. Mumbai’s RevPAR increased 3.7 per cent to Rs 5,867 per room per night. However, 72 per cent occupancy for a leisure destination is considered to be quite strong and higher than other popular destinations. Jaipur, for instance, had occupancy of 67 per cent last year, while Agra was even lower at 66 per cent.
 
J B Singh, president and chief executive officer (CEO) at InterGlobe Hotels, said the Goa market needs more branded hotels. “Rates have been good in Goa. The good thing about Goa is that it has managed to get out of the seasonality factor, which is a trait of most leisure destinations. This has happened in the last couple of years.”

InterGlobe is a joint venture (JV) between InterGlobe Enterprises and French hotel major Accor. The JV owns 16 hotels, which runs under the Ibis brand owned by Accor. Goa has a 200-room Ibis hotel and the JV has recently purchased another land parcel, where it will set up a 130-room hotel. “If someone offers us a good site in Goa, we would be quite happy to look at a third Ibis there,” said Singh. According to the hotel consultancy report, Goa has approximately 6,700 branded hotel rooms and is expected to reach 8,500 in the next four years.
 
Raj Rana, CEO, South Asia, Radisson Hotel Group, said Goa had marketed itself quite well initially to overseas travellers and in recent times to domestic travellers. “Goa gets a strong group charter business from the overseas markets. In the summer and monsoon months when overseas visitors go down, the domestic numbers pick up. The overall supply has remained constrained, while demand has been strong, leading to a higher average room rate. Our hotels have made steady gains in the last couple of years,” added Rana. According to Hotelivate, the charter (group tour) business is expanding, with the gradual addition of flights from the Scandinavian countries and Iran.
 
Rana said the underlying infrastructure in Goa is supporting the growth of tourism. It is also well connected with multiple daily flights from most cities. “I will not be surprised if we add more hotels in Goa,” he said. Radisson is discussing options with two asset owners in Goa.