The hospitality industry continued its positive momentum in the second quarter of 2024, registering a Year-on-Year (YoY) Revenue Per Available Room (RevPAR) growth of 4.8%, according to JLL’s Hotel Momentum India (HMI) report. The growth, driven primarily by an increase in Average Daily Rate (ADR), comes despite a quarter-on-quarter decline in RevPAR due to seasonal dips in occupancy.
Hyderabad emerged as the standout performer, recording an impressive 11.9% growth in RevPAR compared to Q2 2023. Delhi and Bengaluru followed, with YoY increases of 11.8% and 10.4%, respectively. This surge highlights Hyderabad’s strong market performance amidst a broader industry trend.
The second quarter of 2024 saw the addition of 50 new hotels, adding 3,755 rooms to the market, with nearly 90% of these located in Tier II and Tier III cities such as Tirupati, Udaipur, Thane, and Mysore. This expansion reflects ongoing investor confidence and a strategic shift towards these growing urban centers.
Despite a dip in occupancy rates, attributed to the summer vacations and reduced corporate travel, ADR levels continued to rise across major markets, leading to an overall increase in RevPAR, except in Goa where ADR experienced a slight decline.
The sector also witnessed the conversion of 15 existing hotels, accounting for 11% of the total inventory signed in Q2 2024. This move underscores the trend towards rebranding and repurposing existing assets to meet evolving market demands.
Looking ahead, the hospitality sector is expected to benefit from a resurgence in corporate travel, festivals, and a busy calendar of Meetings, Incentives, Conferences, and Exhibitions (MICE). Jaideep Dang, Managing Director of Hotels and Hospitality Group, India at JLL, anticipates a strong performance in the coming quarters driven by these factors.
“The hospitality sector continues to exhibit resilience and growth, backed by robust ADR improvements and expanding hotel investments across India. While the summer season traditionally dampens corporate demand, the forthcoming quarters are poised for a rebound with increased domestic business travel, festive activities, and a full return of MICE events,” Dang commented.
As the industry gears up for a promising second half of the year, the emphasis on Tier II and III cities and ongoing investment in both new developments and existing assets position the sector for continued growth.
