The hospitality sector witnessed 60.9% YoY Revenue Per Available Room (RevPAR) growth in Q4 2022: JLL
The hospitality sector continued to witness strong Year-on-Year (Y-o-Y) growth in performance in Q4 2022 (Oct-Dec), primarily driven by corporate travel, weddings, winter vacations and festivities. The year ended with a 90% Y-o-Y growth in RevPAR for the calendar year 2022 over 2021. The performance in Q4 2021 was strong as well on the back of weddings and domestic leisure travel, however corporate travel was only a fraction of what has been witnessed in Q4 2022. As a result, RevPAR growth of 60.9% Y-o-Y from Q4 2022 over Q4 2021 seems significant. Furthermore, the sector witnessed a RevPAR growth of 30.1% Q-o-Q between Q4 2022 and Q3 2022. This is due to higher levels of corporate travel in Q4 2022 compared to Q3 2022, according to JLL’s latest Hotel Momentum India (HMI) Q4, 2022.
The hotel room demand across both business and leisure destinations remained strong during the quarter primarily driven by Meetings, Incentives, Conferences and Exhibitions (MICE), weddings and other business-related travel. Despite the year-end holidays, most business cities performed well with occupancy levels circa 65% and witnessed a strong growth in the Average Daily Occupancy (ADR) levels. The momentum of Q4 2022 is expected to continue in Q1 2023 remaining busy on the back of weddings, and recommencement of business travel post the year-end holidays. Business travel is expected to grow during Q1 2023 on the back of domestic corporate travel related to critical decisions prior to closure of the financial year.
A total of 81 hotels comprising 6,663 keys were signed in Q4 2022. Additionally, there were 25 hotels signed that were conversions of other hotels. The conversions constituted 27% of the inventory signed in Q4 2022.
Source: STR
All six key markets witnessed strong growth in RevPAR levels in Q4 2022 compared to Q4 2021, due to a comparable low corporate travel base of last year. Bengaluru emerged as the RevPAR growth leader in Q4 2022 with 110.6% growth over Q4 2021, followed by Mumbai and Delhi with a YoY growth of 105.3% and 94.3% respectively.
“Hotel room-night demand growth remained strong in Q4 2022 across major business and leisure destinations. Given the looming global head winds, inbound travel may witness a slowdown. However, domestic economic fundamentals remain strong and is expected to keep the domestic business environment stable. Additionally, a significant increase in hotel investment and related activities was witnessed towards the later part of last year. This momentum is expected to continue in 2023.” said Jaideep Dang, Managing Director, Hotels and Hospitality Group, India, JLL.
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