Among the major markets, Hyderabad led the pack with an impressive 23.6% YoY growth in RevPAR, outpacing other cities like Chennai (17.7%) and Mumbai (16.8%). Although Delhi and Goa experienced a slight dip in ADR, most major markets, including Bengaluru and Chennai, saw strong improvements in both ADR and RevPAR, which helped drive the overall sector growth. Despite occupancy levels remaining stable compared to Q3 2023, the rise in ADR resulted in a significant increase in RevPAR across key markets.

In addition to strong operational performance, the hospitality sector also saw continued growth in supply. During Q3 2024, 30 new hotels with 1,988 keys opened, with approximately 80% of the new inventory located in Tier II and Tier III cities such as Tirupati, Udaipur, Ranchi, and Mussoorie. The quarter also witnessed 96 branded hotel signings, totaling 10,686 rooms, including the conversion of 12 hotels, which accounted for 11% of the total signed inventory.

The upcoming quarter is expected to benefit from continued corporate travel, festivals, and a surge in Meetings, Incentives, Conferences, and Exhibitions (MICE) events. The sustained demand for business travel, coupled with the rise in social events like weddings and festivals, is expected to further boost performance across the hospitality sector.

Jaideep Dang, Managing Director of the Hotels and Hospitality Group in India, noted, “While the summer season led to a temporary slowdown in corporate room night demand, the sector has continued to show growth, especially in ADR. The upcoming quarter looks promising, with a strong outlook for domestic corporate travel and MICE events.”

As the hospitality sector enjoys robust demand across both business and leisure markets, investment in the industry remains strong, with both greenfield developments and operating assets continuing to attract investor interest.

Also Read: Hospitality Sector Sees 4.8% YoY RevPAR Growth in Q2 2024, Hyderabad Leads with 11.9% Surge

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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.

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