SKYE Hospitality, an end-to-end hospitality & strategy consulting company, has released its maiden market analysis on the pulse of the Indian hotel industry for the first six months of 2024. The analysis has shared some interesting insights and perspectives on the Indian hospitality sector.

According to the analysis, 2706 rooms have entered the market in H1 2024. Out of these, 994 rooms (~37%) consisted of upscale rooms, while the remaining (63%) consisted of premium inventories. A total of 22 new projects have opened in H1 2024, with major hospitality brands such as IHCL, ITC, Radisson, Hyatt, ROHL, Bharat Hospitality, and Wyndham contributing to the new projects.

34% of the new supplies were located in the West, followed by the East (28%). The North and South contributed to 26% and 12% respectively. "The Indian hospitality industry is on a strong footing marked by a rise in occupancy, new projects opening, and a bullish pipeline for the future. In the first half, average occupancy in major hotels ranged between 70-75%. Occupancy has risen by around 15-20% compared to the same period last year," quoted Mr. Ankit Kansal, MD, SKYE Hospitality.

"The Indian hotel industry is witnessing a robust rebound backed by a rise in business events, leisure travels, wedding season, etc. Other factors such as the growing trend of staycations, a surge in experiential travel trends amongst millennials & Gen-Z, and a rise in wellness tourism packages are also fuelling demand for hospitality businesses in India. The concept of revenge travel is also there, as most of the hotels operate at 100% occupancy during extended weekends," added Mr. Kansal.

The government is also playing a pivotal role through concentrated policy efforts to boost infrastructure and introduce numerous attractive schemes. Multiple schemes such as Dekho Apna Desh, Incredible India, PRASHAD, Aayush, etc., have been introduced, helping in hotel demand. There has been notable growth in infrastructure development in the form of highways, railway corridors, and airports, enhancing overall accessibility. Consequently, major hotel brands are now launching new products in territories such as North East, J&K, Andaman, and Lakshadweep. These locations have been relatively less explored in the past.

During the same period, around 243,000 Sq. Ft of hotel-based meeting and banquet space entered the market, as per the SKYE analysis. Eastern parts of India accounted for the highest supplies (47%) followed by the North (25%). The Indian event and meeting industry is growing at a steady rate of 8-10%. India is becoming a reputed MICE destination internationally, stemmed by growth in infrastructure, a rise in the economy, and rich cultural heritage.

Commenting on the future outlook of the industry, Mr. Kansal said, "The next 3-5 years will see aggressive expansion in the industry, as both domestic and international brands will extend their footprint across segments."

Taj is presently working on over 20 projects, while Vivanta is invested in around 50 new projects. International hospitality brand Accor is planning to add 5500 new rooms across various brands such as Pullman, Novotel, IBIS, etc. Oberoi Groups is also planning to add around 50 projects in the next 5 years across Oberoi Hotels and Trident. The group is also planning to introduce a new brand, "Oberoi Nature," which will be a smaller format hotel.