Looking ahead in 2023: Recovery of India’s hotel industry

After a not-so-good start to the year brought on by an increase in the Omicron variant, India’s hotel industry eventually had a great 2022 with revenue per available room (RevPAR) recovering to a 100% of the pre-pandemic levels. Adding to the relief of many big and small hotel management companies in India.

Looking ahead at 2023, hospitality management companies in India should keep these key factors in mind while looking at India’s hotel performance and forecasting:

• Prices and inflation: Real ADR (inflation-adjusted) has improved, but sluggish inflation combined with potential western recessionary headwinds may restrain rate growth.
• International demand and leisure: Although this goes both ways, we can anticipate a return to some semblance of normalcy in the business mix. Although if domestic leisure demand may not be as strong as it once was, it will still be substantial and crucial. The country’s visa restrictions may assist balance the outflow of Indian tourists to other nations, particularly to places like the United States.
• Incoming supply: While from a global viewpoint, the predicted incoming supply for 2023 (about 6% of the current supply) is not unusual, its effects will vary depending on where in the world you are.
• Growth vs. absolute metrics: Owners and operators must match growth aspirations to the truth of how successful the prior year was. A comparable outcome or modest growth isn’t all that bad, especially in light of prior results and the aforementioned variables.

When India’s performance is contrasted with that of the broader Asia Pacific area, including its various variations, and the global performance, the rather exaggerated RevPAR recovery chart that is presented below becomes more fascinating. It reflects a few trends that ProMiller has observed first-hand being one of the third party hotel management companies in India.

And thankfully, the future bookings show that the demand remains for the coming months in 2023. While pickup is also somewhat short-term, medium- to long-term occupancy on the books is still relatively low. So, whatever demand is currently unmet for the future should be satisfied closer to the arrival date. As there is considerably more trust in travel now than there was at this time last year, we can already see pickup windows starting to lengthen. This sets an optimistic tone for the hotel industry in India in general. Of course, for specific hotel management companies in India, the endline can only be optimized by a customized strategy. A balanced split of business between sectors like leisure, corporate, transient, weddings and more is vital to capture the demand that looks good for the year 2023.

Read the complete blog at https://www.promiller.in/post/looking-ahead-in-2023-recovery-of-india-s-hotel-industry