How Hotels Are Adapting To Meet The Demands Of Domestic Travelers

India's hospitality sector is undergoing a significant shift in travelers' preferences, as more people opt for domestic travel due to the COVID-19 pandemic's impact on international journeys.

Nirav Akshay
CEO
Efcee Hotels - A Leela worldwide Venture

As a result, hotels are adapting to cater to the evolving needs of domestic travelers. The Indian Tourism Statistics 2023 report reveals that domestic visitors constituted about 87 percent of all tourists in India in 2022, a trend expected to continue in 2023. The report also highlighted that around 2.4 billion domestic tourists visited India in 2022, marking a 27 percent increase from the previous year. Factors such as rising discretionary incomes and a growing middle class have made travel more accessible, fueling this surge in domestic travel.

To accommodate the increase in domestic travelers, India's hotel industry has made several adjustments. A recent HVS ANAROCK report projects the Indian hotel market to grow at a CAGR of 10.8 percent between 2023 and 2027. In 2022, India's hotels experienced an overall occupancy rate of around 55 percent, a significant improvement from the previous year's 37 percent. The average room rate (ARR) for hotels in India was approximately INR 6,500 in 2022, with a predicted CAGR of 2.7% from 2023 to 2027. To cater to the growing number of domestic travelers, hotels in India are employing various strategies, such as: