The Indian hospitality sector has shown resilience and displayed signs of recovery and promising growth after the devastating impact of the coronavirus pandemic. CBRE South Asia, a real estate consulting firm, recently unveiled its report, 'Indian Hospitality Sector: On a Comeback Trail,' shedding light on the sector's growth and overall revival.
Key areas of growth
The report said that the sector is projected to attract over $2.3 billion in investments over the next 2-5 years.
With a renewed focus on growth, the Indian hospitality sector anticipates the addition of approximately 12,000 hotel rooms in 2023 alone.
The report forecasts a steady compound annual growth rate (CAGR) of around 3.3 per cent in the number of hotel rooms by 2025. This upward trajectory is complemented by the expectation that demand will outpace supply, leading to positive performance indicators for the sector.
The report further reveals that key industry performance metrics, such as occupancy rates, average daily rates (ADR), and revenue per available room (RevPAR), are expected to surpass pre-pandemic levels in the coming year.
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RevPAR witnessed a 94 per cent growth in 2022 compared to the previous year.
These statistics indicate a strong rebound, with renewed footfall and steady revenue generation, signalling the sector's successful recovery from the pandemic.
Rami Kaushal, Managing Director of Consulting & Valuation Services, India, Middle East & Africa also shares that domestic tourism has witnessed a resurgence, boosted by increased domestic visitor spending, infrastructure initiatives, and the rise of 'bleisure' (business + leisure) travel.
Religious tourism has also undergone a transformation, with leading hotel chains catering to the changing preferences of religious travellers who seek clean, hygienic, and family-friendly accommodations.
The report also sheds light on India's reputation as a sought-after medical tourism destination. Factors such as healthcare infrastructure reduced waiting times, and cost advantages have contributed to the country's popularity among medical tourists.
Factors responsible for resurgence of hospitality sector
Successful vaccination drives, easing of travel restrictions, the opening of borders and sustained economic growth have acted as catalysts, restoring confidence among investors and travellers alike.
International and domestic investor interest have contributed to driving growth within the Indian hospitality space.
Indian companies have actively engaged in investing and expanding their presence, while international hotel chains have seized the opportunity to establish themselves in the Indian market.
Anshuman Magazine, Chairman & CEO - India, South-East Asia, Middle East & Africa at CBRE, emphasises the significant investments made by international hotel chains and private equity funds, capitalising on the growing demand for hospitality services in India.
He also attributes the government's continuous focus on reforms as a crucial factor, with expectations that the tourism and hospitality sector will contribute $50.9 billion through visitor exports by 2028.