Indian Hospitality: Trends & Opportunities

Hotelivate’s 2019 Indian Hospitality – Trends & Opportunities Report's comprehensive coverage of the country's branded hospitality landscape, the national trends, and demand and supply forecasts.

A 2019 performance review of hotels scattered across the length and breadth of the country shows that despite the demand-supply equation favoring growth in most hotel markets, the nationwide numbers (both occupancy and average room rate) has barely moved. Though the growth was recorded across all performance metrics, it wasn't reflective of an up-cycle, the way one would expect. So, post-hypothesis, it was found that 'hotels are just not making offers that can't be refused’; i.e. not alluding to simply dishing out great deals or attractive packages.

The easiest conclusion one may draw is that these hotels are in very strong markets, with negligible weekday-weekend seasonality. However, the fact is that all of them are based in urban corporate markets, where the industry's claim has traditionally been that weekends are lean. Yet, these hotels have ducked the trend and performed well on weekends, without which achieving an occupancy in the high 80s or 90s as a year-round average is not mathematically probable.

The last time our industry saw a meaningful growth in the nationwide average daily rate (ADR), almost three-fourths of the hotels were clocking 70% plus occupancies. The industry will truly reap the benefits of this up-cycle only when a large majority of existing hotels consistently push their rates, and subsequently, the revenues northward.

The Hotelivate report presented three broad thoughts for you to toy with from a revenue optimisation standpoint:

1. A singular strategy could impact long-stay or weekend demand: Rather than making just the daily ADR the threshold, the daily target revenue can be the deciding factor. This, when achieved, should shift the focus to the weekly revenue figure, eventually resulting in higher year-round occupancy.