Hotels shrug off covid blow in 2023

The organized hotel industry is looking to end the year with an occupancy rate of 63-65%, registering an increase from 2022

- Varuni Khosla

• On an average this year, the traveller had to shell out ₹7,200-7,400 for a room in the top hotel brands

Sustained growth in the leisure segment, coupled with encouraging signs of recovery in in-bound tourism, has been the highlight for the hospitality sector in 2023. But on some important fronts—like total transactions volumes and occupancy—the sector is still trailing behind pre-covid 2019 numbers.

The organized hotel industry— which has about 200,000 branded rooms across the country—is expecting to end the year with an occupancy rate of 63-65%, marking a five-percentage-point increase from 2022, but still 1-2 percentage points below 2019. But because most hotels charged far more money than they did in 2022 and 2019, the revenue gap did not show.

Room rates have been a pain point for most customers. According to data put together by two top hospitality consultancies exclusively for Mint, the average room rates are far higher than their range in 2019.

On an average this year, the traveller had to shell out ₹7,200-7,400 for a room in the top hotel brands, indicating a year-on-year increase of 20%, and 22% higher from 2019, said data from HVS Anarock.

This upward trajectory has also resulted in a 30% increase in Revenue Per Available Room (RevPAR) from ₹4,600-4,800 in 2022, and a 20% uptick from 2019 levels. RevPar is calculated by multiplying a hotel’s average daily room rate (ADR) by its occupancy rate.