- Chennai recorded the strongest growth in Revenue Per Available Room (RevPAR) at 21.7% in Q1 2024 (January-March), surpassing Q1 2023.
- In Q1 2024, 36 new hotels comprising 2,316 keys opened, with more than 75% of them located in *Tier II and Tier III cities.
- Additionally, Q1 2024 witnessed the conversion of 13 hotels, accounting for 12% of the total signed inventory.
The Indian hospitality sector continued to witness Year-on-Year (Y-o-Y) growth in performance in Q1 2024 (January-March), primarily driven by a significant rise in Average Daily Rate (ADR) of 8.5% over Q1 2023, resulting in a RevPAR growth of 11.4%. Major factors contributing to this growth included an increase in corporate travel, weddings, and Meetings, Incentives, Conferences and Exhibitions (MICE) demand at the end of the financial year (FY24). The sector also noted a RevPAR growth of 5.5% Quarter-on-Quarter (Q-O-Q) in Q1 2024, compared to Q4 2023. This can be attributed to higher levels of corporate travel in Q1 2024 as opposed to Q4 2023 (October-December), which typically sees a decrease during the holiday season, according to JLL’s Hotel Momentum India (HMI) Q1, 2024. During the quarter, there was a robust demand for hotel rooms in both business and leisure destinations. The occupancy levels in key business markets were strong, averaging around 70%, and supported by significant growth in Average Daily Occupancy levels.
Source: STR
The positive momentum from the first quarter is expected to continue into the second quarter, with business travel, MICE, and weddings driving the busy season. Additionally, the following quarter will also see a surge in leisure travel, particularly during the summer holidays.
In Q1 2024, there were 90 branded hotel signings comprising 9,710 rooms. Furthermore, 13 hotels signed were conversions of other hotels, accounting for 12% of the inventory signed in Q1 2024. Branded hotel openings comprised 36 hotels with 2,316 keys, of which 75% of the total number of keys were in *Tier II and III cities, including Jaipur, Indore, Surat, and Ayodhya, to name a few.
Chennai emerged as the RevPAR growth leader in Q1 2024 registering a growth of 21.7% over Q1 2023, followed by Hyderabad and Delhi with Y-o-Y growth of 21.1% and 19% respectively.
“The first quarter has set the ball rolling for the hotel sector’s strong performance throughout 2024 – healthy consumer sentiments and domestic corporate travel will continue to be the key drivers. Key business and leisure locations are witnessing strong demand, which has translated to growth in Average Daily Rate (ADR) levels, assisted by limited supply additions. Broadly, the demand parameters are in line for the upwardly stable performance of the sector through 2024. The only blip could be the later part of summer, as that period may have increased outbound travel and perhaps a little lull after the general election results”, said Jaideep Dang, Managing Director, Hotels and Hospitality Group, India, JLL.
Also Read: India’s hospitality sector witnessed USD 401 million investment activity in FY23
