Double-digit growth marks a historic year for hospitality industry

In a year defined by challenges, including soaring hotel fees, increased airfares, and heightened movement costs, it was a promising 2023 for the tourism and travel sector. This was facilitated by Indian tourists seizing every opportunity to explore, leaving their mark on the world stage.

- Varuni Khosla

Indeed, India’s hotel industry surged back to life, driven by a post-covid uptick in travel. Double-digit revenue growth was propelled by domestic leisure trips, meetings, incentives, conferences, and exhibition (MICE) events, the G20 Summit, and the return of business travellers. The added excitement of the ICC Cricket World Cup saw hotels fill up, and unorganized accommodations were abuzz.

Many companies witnessed a historic year, achieving their best results during the first two business quarters. City hotels, in particular, reached unprecedented lifetime highs during this period. "It was an important year because covid-19 had disrupted business on and off in 2020-22. Occupancies, and average room rates across top hotels saw unprecedented rates," Kapil Chopra, director, Untitled Hotels and Resorts, which runs luxury brand, Postcard Hotels, said.

The year 2024 could see consistent growth, especially in domestic travel. Premium hotels across India witnessed impressive occupancy rates of 70-72%, with average room rates exceeding ₹6,000 a night, according to ratings agency Icra. Hotel revenues saw a robust 20% increase over 2022 while operating margins surpassed the 30% mark.