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India's hospitality sector experienced strong growth in Q3 2024, with Revenue Per Available Room (RevPAR) rising 10.8% YoY and 2% over the previous quarter, driven by increased corporate travel. Cities like Hyderabad, Chennai, and Mumbai led with RevPAR growth of 23.6%, 17.7%, and 16.8%, respectively. The quarter saw 96 branded hotel signings (10,686 rooms), with 80% in Tier II/III cities like Tirupati and Udaipur, reflecting growing demand beyond metros. With stable occupancy rates, rising Average Daily Rates (ADR), and upcoming festive and business travel, the sector is poised for continued growth, signaling a strong recovery and expanding opportunities in emerging markets.
The hospitality sector in India has experienced notable growth in the third quarter of 2024, reflecting a strong recovery from previous years. According to the latest report from JLL's Hotel Momentum India, the Average Daily Rate (ADR) increased, leading to a Year-on-Year (YoY) rise in Revenue Per Available Room (RevPAR) of 10.8%. This growth is particularly significant as it comes during a period typically characterized by heightened corporate travel, which has contributed to a 2% increase in RevPAR compared to the previous quarter. Advertisement
While some markets, such as Delhi and Goa, saw a slight decline in ADR, other major cities like Bengaluru, Chennai, Hyderabad, and Mumbai reported substantial increases. Hyderabad stood out with the highest growth in RevPAR, soaring by 23.6% compared to the same period last year. Chennai and Mumbai followed closely, with YoY increases of 17.7% and 16.8%, respectively. This trend indicates a shift in travel patterns, with more business and leisure travelers returning to these urban centers.
Looking ahead, the hospitality industry is poised for further growth as the upcoming quarter is expected to benefit from an increase in corporate travel, festivals, and various Meetings, Incentives, Conferences, and Exhibitions (MICE). These events are crucial for driving hotel occupancy and revenue, as businesses and organizations plan their year-end gatherings. The sustained demand for domestic business travel suggests that hotels will likely continue to see increased bookings.
In terms of new developments, the sector witnessed significant activity in Q3 2024, with 96 branded hotel signings amounting to 10,686 rooms. Notably, 12 of these were conversions of existing hotels, accounting for 11% of the total inventory signed. The openings included 30 new hotels with 1,988 rooms, with about 80% of these located in Tier II and III cities such as Tirupati, Udaipur, Ranchi, and Mussoorie. This trend highlights the growing importance of smaller cities in the hospitality landscape, as they become increasingly attractive to both domestic and international travelers.
The overall stability in occupancy rates across major markets, alongside improved ADR levels, signals a positive outlook for the Indian hospitality sector. As travel restrictions ease and consumer confidence grows, hotels are better positioned to capitalize on the resurgence of travel. Industry experts believe that the combination of rising corporate travel and the expansion of hotel offerings in emerging markets will continue to drive growth in the coming months.
In summary, the Indian hospitality sector is on a steady upward trajectory, driven by increased corporate travel and new hotel developments. With a focus on both established and emerging markets, the industry is adapting to changing travel dynamics and preparing for a bustling season ahead. As we move into the next quarter, stakeholders are optimistic about the opportunities that lie ahead for hotels across the country.
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