Chennai: The hospitality sector is poised for an improvement in occupancy to 66-67 per cent in 2024, coupled with a 6-8 per cent increase in Average Room Rates.
The outlook for India’s hospitality sector in 2024 is imbued with a sense of optimistic realism. HVS Anarock anticipates continued growth, driven by sustained domestic demand, the return of international travel to its full glory, and the growth of niche tourism segments coupled with the gigantic growth taking place in travel infrastructure across the country.
National-level occupancy is expected to improve to 66-67 per cent in 2024 up from 63-65 per cent in 2023. A 6-8 per cent increase in Average Room Rates will push RevPAR to Rs 5,281 during the year, almost 31-33 per cent higher than the pre-pandemic RevPAR recorded in 2019.
In 2023, the occupancy levels had improved by 3-5 per cent from the previous year and had nearly reached the pre-pandemic levels.
The ARR for 2023 reached Rs 7,400-7,600, which surpassed the figures from 2022 by 21-23 per cent and 2019 by 24-26 per cent. The growth in average rates helped RevPAR to reach Rs 4,662-4,940 in 2023, indicating a significant increase of 29-31 per cent from 2022 and 19-21 per cent in 2019.
Amid extreme climate changes, escalating geopolitical tensions, growing economic headwinds, and rising travel costs, the global travel industry shifted gears making vigorous strides towards pre-pandemic levels, as more and more people traveled for business, education, and leisure activities.
India stood out not just as a participant but as a beacon of growth and optimism. Buoyed by robust economic growth, and the prestigious G20 presidency, India showcased remarkable resilience and dynamism. These milestones, along with the steady rise in domestic tourism and the revival of inbound tourism catalyzed the travel and tourism sector, in turn propelling the hospitality sector to new heights in 2023. While revenge travel gradually declined, the leisure segment experienced sustained growth, driven by evolving traveler preferences and a rising interest in unique experiential travel.
