Goa leads, with 300+ per cent growth in revenue per available room. The easing of travel restrictions, an accelerated vaccination drive and a nascent rise in corporate travel are spurring rapid revival in the hospitality industry.
The hospitality industry in India witnessed a growth of 169.4% in Revenue Per Available Room (RevPAR) during Q3 2021 (July-Sep) as compared to Q3 2020, according to Hotel Momentum India (HMI) Q3 2021, a quarterly hospitality sector monitor by Jones Lang LaSalle Incorporated (JLL). Furthermore, at a pan-India level, there has been a 122.9% growth in RevPAR in Q3 2021 as compared to Q2 2021, due to strong recovery in leisure demand as travel restrictions were eased post the second wave of the pandemic.
It must be noted that the high Year on Year (Y-o-Y) growth number of Q3 2021 is primarily due to the fact that the hospitality sector was particularly depressed in Q3 2020. Post the full and partial lockdowns witnessed in many states during April and May of 2021, the sector witnessed a sharp recovery in leisure travel towards the end of Q2 2021. This trend continued into Q3 2021 as inter-state travel restrictions were further eased and an improvement in travellers’ confidence was seen with the large-scale vaccination drive across the nation.
Goa re-emerged as the RevPAR leader in absolute terms in Q3 2021 with a growth of 389.8% as compared to the low base of Q3 2020. Bengaluru witnessed 213.2% growth in RevPAR followed by Hyderabad with a 173.5% increase compared to the same period of the previous year.
For the next two quarters (Q4 2021 and Q1 2022), growth in travel is expected to continue as India further ramps up its vaccination rate resulting in improved sentiment towards domestic travel, especially business travel. In fact, Information Technology and IT-enabled services companies have indicated that their travel expenditure will increase in the coming quarters as they foresee employees returning to the office/campus as well as resuming travel for work. However, employees returning to work from office may not immediately embark on business-related trips. On the other hand, leisure locations are expected to see a further increase in occupancy and average rates supported mainly by leisure travel and social gatherings.
“The sector has witnessed a sharp recovery in Q3 2021 post the second wave of the pandemic. Holiday destinations are sold out on most weekends with domestic tourists deciding to explore different destinations across the nation. Demand for weddings continue to grow as restrictions on large gatherings are further eased.
F&B has also witnessed a strong recovery both in major metropolitan cities as well as in tier 2 towns, on the back of improved market sentiments and growth in vaccination numbers. In this quarter, we have witnessed a slight up-tick in corporate travel as well, which we believe would be a major step towards a full recovery for the sector,” says Jaideep Dang, Managing Director, Hotels and Hospitality Group, South Asia, JLL.