Industry experts predict that the hospitality sector will experience significant improvement in 2023 compared to both 2022 and the pre-pandemic year of 2019. Despite soaring airfares and room tariffs, the Indian hospitality industry is set to have its best-ever summer season, with tourists continuing to visit popular destinations.

Aashish Gupta, Consulting CEO of the Federation of Associations in Indian Tourism & Hospitality (FAITH), highlighted the widespread boom across destinations and tourism markets during this first full year after the Covid-19 pandemic. Travel activities are expected to be 20-30% higher on a month-to-month basis compared to pre-pandemic levels. Occupancies and average daily rates (ADRs) are projected to increase by 15-40%, varying based on location.

The positive trend in the hospitality industry extends to various metrics. The fourth-quarter GDP numbers for 2023 revealed a 9.1% real growth in trade, hotels, transport, communication, and services related to broadcasting. Occupancy rates for the sector in 2022 were 15-17% higher than in 2021 and only 5-7% lower than in 2019. Furthermore, consultancy firm HVS Anarock reported that India-wide occupancy is expected to reach 66% in 2023, with a 16-17% rise in average room rates (ARRs) driving the revenue per available room (RevPAR) to ₹4,690, an 18% increase from pre-pandemic levels.

Rajesh Magow, co-founder and Group CEO of MakeMyTrip observed positive trends in leisure travel ahead of the upcoming holiday season. The preference for relaxed itineraries and experience-led travel has resulted in increased bookings and average per-passenger spending.

Popular destinations, particularly those offering relief from the heat and city life, have seen a positive start to the summer season. However, higher airfares have affected the travel plans of budget consumers, while premium consumers are indulging in lavish leisure travel.

MakeMyTrip highlighted that long-haul destinations like Europe and short-haul destinations such as Thailand, Singapore, Malaysia, Maldives, and the UAE are generating significant interest in international travel. In the domestic market, Goa, Kochi, Srinagar, Dehradun, and Leh are the most sought-after flight destinations. Mountain destinations are the preferred choice this summer, with Manali, Kashmir, Mcleod Ganj, Ooty, and Coorg ranking high.

With the surge in travel demand, Oyo plans to open 300 new hotels by August 2023 in popular mountain destinations such as Manali, Mussoorie, Nainital, Srinagar, Shimla, Ooty, and Darjeeling. Shreerang Godbole, Chief Service Officer at Oyo, expressed excitement about the growth and development of the Indian travel and hospitality industry in response to the increased travel demand.