NEW DELHI: Indian hospitality sector is all set to record its best-ever summer season this year as tourists continue to flock to popular destinations despite a huge surge in airfares and room tariffs.
Aashish Gupta, Consulting CEO of the Federation of Associations in Indian Tourism & Hospitality (FAITH), said as this summer season is the first full year post-Covid-19 pandemic, there is a large-scale boom across destinations and tourism markets.
“Travelling activities are expected to be 20-30% higher on a month-on-month basis than in a similar full-year pre-Covid. Occupancies and average daily rates (ADRs) across markets, formats and locations will be higher by 15-40% depending upon the type of location,” Gupta told this publication
As per industry experts, all metrics of the hospitality industry are expected to improve in 2023 when compared to 2022 and the pre-covid year of 2019. This improvement is largely attributed to big business brought during the summer season when travel activity is at its highest level. The indication of the same was visible in Q4FY23 GDP numbers. Trade, hotels, transport, communication and services related to broadcasting as a category showed a 9.1% growth on real terms during the January-March 2023 quarter.
The sector closed CY22 with occupancy in the range of 59-61%, up 15-17% over CY21 and only 5-7% points lower than CY19, consultancy firm HVS Anarock had said in an earlier report. The report added that India-wide occupancy will improve to 66% in CY23, which coupled with a 16-17% rise in average room rates (ARRs) will push revenue per available room (RevPAR) to `4,690 during the year, about 18% higher than the pre-pandemic RevPAR recorded in CY19.
‘Observing some early positive trend’
Rajesh Magow, co-founder and Group CEO of India’s leading travel platform - MakeMyTrip - said they are observing some early positive trends in leisure travel ahead of the upcoming holiday season.
“The preference for relaxed itineraries continues, with the average room night per booking for the April-June quarter increasing for domestic and outbound holiday packages. The average nights booked for outbound packages for the summer quarter is 27% higher than last year’s corresponding period; and almost 85% higher than the pre-pandemic average,” Magow told this publication.
He added, “In domestic packages, too, we have seen a 54% increase in average room nights booked this year over the corresponding period in 2019. The preference for relaxed itineraries has positively impacted average per-passenger spend. Travellers are seeking experience-led travel, resulting in more bookings with pre-booked activities.”
Radisson Hotel Group spokesperson said their travel during this year’s summer season has kickstarted on a positive note with consumers taking trips to the hills preferable to get respite from the heat and hustle of city life.
“On average, the length of stay is around 3-5 days which inculcates activities within and outside the property as well. We are hoping this momentum picks up further during the month of June and July before the onset of monsoon season which is usually the lean period for the industry,” the spokesperson said.
A senior executive of a leading resort chain said that the industry could have clocked better numbers if not for higher airfares. “Travel plans of budget consumers have been impacted due to rising airfares and fewer chances of getting a confirmed train ticket. The premium consumers, however, are spending lavishly on leisure travel this season,” he added.
Airfares have skyrocketed owing to the grounding of Go First. The budget carrier used to carry 8-9 lakh passengers per month and its grounding has led to a big mismatch between demand and supply.
Popular destinations remains first choice of travellers
According to MakeMyTrip, on the international front, while long-haul destinations, including Europe, are generating a lot of interest, short-haul destinations such as Thailand, Singapore, Malaysia, Maldives, and UAE make it to the top five. In the domestic market, Goa, Kochi, Srinagar, Dehradun, and Leh are the most sought-after flight destinations. From an accommodation lens, the top ten most booked destinations remain consistent, led by Goa. Leading metropolitan cities, such as Delhi, Bangalore, Mumbai, Hyderabad, and Chennai, take the next five slots. Jaipur, followed by Kolkata and Pune, complete the top ten list.
A recent survey by Oyo noted that mountains are the most preferred choice this summer for travellers, followed closely by beaches. India’s favourite mountain destination is Manali, followed by Kashmir, Mcleod Ganj, Ooty and Coorg. Buoyed by high demand for mountain destinations, Oyo is on course to open 300 new hotels by August 2023 across cities such as Manali, Mussoorie, Nainital, Srinagar, Shimla, Ooty and Darjeeling.
Shreerang Godbole, chief service officer at OYO, said: “As we enter the summer travel season, we are thrilled to see a surge in travel demand and a strong desire among travellers to explore the beauty and diversity of India. This surge in travel demand is a promising sign for the growth and development of the Indian travel and hospitality industry.”