Indian Hospitality Industry shows great signs of Recovery

The hospitality industry in India is showing great sign of recovery with hotels reporting an

improvement in room bookings in the third quarter of the year, although it's helped by

discounted room rates by various dominant hotel suppliers like Oyo Rooms, Expedia, Desia etc

and average room occupancy rate in the quarter ended September — traditionally the lowest

period of business for hotels in the year — stood at 56.5 per cent, up from 53.2 per cent in the

year-ago period. For the nine months to September, hotel occupancies were 58.2 per cent against

56.4 per cent last year, according to STR Global that tracks supply and demand data for hotel

industry.

According to hospitality experts said the change of government at the Centre has improved the

business sentiment. However, it seems part of the positive sentiment comes from discounted

room rates. Among Indian cities, only Mumbai reports average rate of all branded hotel rooms of

over Rs 7,000. Average room rates in Goa and Delhi-National Capital Region are above Rs

6,000 while in the case of Chennai it just about makes the Rs 5,000 level.

Hoteliers expect to increase rates in the coming season as their business improves. "Room rates

have been lower, but for the upcoming season the trend is more positive.

Hoteliers said that while the sentiment and revenue has improved after the change in

government, it has yet to translate into a big boost in their hotel business. Some of their gains of

the third quarter were offset by a poor show in October, but most said their business has

improved this month. "Business hotels took a hit during October but our resort destinations like

Kerala and Goa have done well in the third quarter," said Ajay Bakaya, executive director at

budget hotel chain Sarovar Hotels. Dilip Puri, India MD at Starwood Asia Pacific Hotels said its

properties reported some strong numbers till September.

While hoteliers do expect some improvement in their business in the fourth quarter as well, they

feel any significant improvement in overall business activities in the country will depend on

measures announced in the next Union budget present by Finance Minister Arun Jaitley in

March, 2016

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