India’s Hotel Occupancy to Improve to 66 Percent in 2023

Skift Take

Strong leisure travel demand and resumption of international flights have been instrumental in reshaping the fortunes of the hospitality sector. But will the trend continue?

Amrita Ghosh

Occupancy in Indian hotels is expected to improve to 66 percent in 2023, according to hospitality research firm HVS Anarock’s latest report. India’s hospitality sector ended 2022 with occupancy in the 59-61 percent range, up 15-17 percentage points from the previous year, the report said. Average room rates recovered fully in 2022, crossing 2021 levels by 37-39 percent and revenue per available room in 2022 increased by 89-91 percent over the previous year. Some 166 new hotels with 14,885 rooms were signed in 2022, indicating a 33 percent increase in brand signings by keys over the previous year. “We expect India-wide occupancy to improve to 66 percent in 2023, which coupled with a 16-17 percent increase in average room rates will push revenue per available room to $57 during the year, almost 18 percent higher than the pre-pandemic level recorded in 2019,” said Mandeep Singh Lamba president of South Asia at HVS Anarock.

Over 1.4 million medical tourists visited India in the past year, said Minister of State for Tourism Shripad Naik. That was a 100 percent increase versus 2021. The number of foreign tourists traveling to India for medical tourism saw a 66 percent rise in 2021, despite the Covid-19 pandemic. Addressing the inaugural session of the second G20 Health Working Group Meeting in India’s coastal state Goa, Naik urged delegates to collectively contribute to a more holistic and sustainable approach to global health and made an appeal to engage in meaningful discussions on the global health architecture. The Indian medical value travel market size, currently valued at $5-6 billion, is expected to grow to $13 billion by 2026. As per data from the Indian Institute of Public Administration, India will account for 6 percent of the global medical tourism market share by 2023.

Online travel company MakeMyTrip has opened a new franchise store in Hubli in the south Indian state of Karnataka. The franchise network will help serve those customers who may be more comfortable talking to someone they trust. “We aim to build a hyper-local marketing connection by leveraging our partners to build travel communities in cities like Hubli. We have also invested in technology and training to ensure the service remains consistent across all franchises,” said Jasmeet Singh, business head of holidays and experiences at MakeMyTrip. Karnataka is a key holiday package market for the company, contributing almost 10 percent in bookings.  

Pride Hotels Group has announced the launch of Pride Hotel Bhopal in the central Indian state of Madhya Pradesh. The 75-room hotel will be the third property for the group in the state, with two others located in Indore and Jabalpur. “With this launch, we now move a step further to establish our presence across popular destinations across the country,” said Satyen Jain, chief executive of Pride Hotels Group.

Vietnam’s flag carrier Vietnam Airlines has announced it will connect India’s financial capital Mumbai with Hanoi and Ho Chi Minh City from May 20. As part of its summer schedule, the airline will commence four flights per week to Mumbai from Hanoi and three flights in a week from Ho Chi Minh City. The new route will be operated by an Airbus A321 aircraft, the airline said in a statement. In June 2022, the airline introduced non-stop service connecting Vietnam and India’s capital New Delhi, and from March 26 this year, the flight services between Hanoi and New Delhi were increased to four flights a week while Ho Chi Minh City-New Delhi is being serviced through three weekly flights.

Electric vehicle startup BLive has launched a green hospitality program to promote green mobility that the company claimed will help reduce the overall carbon footprint and enable the hospitality industry to deliver an environment-friendly experience to guests. Under the initiative, BLive will provide hotels, resorts and hospitality chains with e-cycles, electric two-wheelers, three-wheelers, four-wheelers along with high-speed charging stations on their premises for all internal transportation. In the first stage of this program, BLive has partnered with leading hospitality brands such as JW Marriott Hotel Bengaluru, Novotel and Varca Le Palm Goa to kick off with switching to electric mobility. BLive plans to extend the benefits of this program to over 200 hotels and resorts in the next two years. 

In a revamped compensation structure for pilots and cabin crew, Tata-owned Air India has doubled the guaranteed flying allowance component from the current 20 hours to 40 hours per month for pilots. There will also be additional compensation for pilots undergoing training for command upgrade and conversion training for the time spent in-ground and simulator training, news agency PTI reported citing source. The carrier has also extended the contracts of fixed term contract pilots up to 58 years of age. A large number of senior pilots, who have flown for four or more years as Commanders, will be promoted to the senior commander rank, giving them instant inclusion into the management cadre with extra allowance for executive duties. Under the new structure, salaries will be hiked for more than 2,700 pilots across Air India and AIX Connect (including Air Asia India and Air India Express) as well as for more than 5,600 of its cabin crew. 

Indian Railways has registered record revenue of $24.8 billion for the financial year 2022-23, the railways ministry declared while announcing the annual performance numbers. For 2022-23, gross revenue stood at $29.1 billion compared to $2.3 billion in 2021-22. “This is nearly $6 billion more than the previous year, reflecting a 25 percent growth. During this financial year 2022-23, freight revenue too leapfrogged to $1.97 billion, a growth of nearly 15 percent on previous year,” the ministry said. Railways’ passenger revenues registered an all-time high growth of 61 percent to reach $7.7billion. After three years, Railways was able to fully meet the pension expenditures, it said. 

Karnataka-based artificial intelligence-led digital automation platform Ecobillz plans to foray into the European market by establishing a base in the UK. The start-up provides customized solutions to some of the leading hotel chains in India, by offering a contactless experience from check-in till departure. “We have always targeted the hospitality industry through our product and Europe and Africa are hotbeds of tourism with the market alone offering nearly 6,000 premium and luxury hotels, which we can target immediately,” said Ameet Patil, founder and chief executive of Ecobillz. Within the next six months, the start-up plans to set up an entity in Dubai and cater to hotels in the Middle East market, he added. 

Ride-hailing app Uber has signed a pact with Indian airports operator Airports Authority of India to build its cab service zone across their airports, reports news agency Press Trust of India. “Uber has recorded nearly 100 percent year-on-year growth in airport trips in January and February this year and one in every 10 trips on the Uber platform is an airport trip,” said Prabhjeet Singh, president of Uber India and South Asia. The memorandum of understanding includes all airports managed by the Airports Authority, but Singh said operations across all of them will happen in a phased manner. Uber Zone enables the company to provide dedicated pickup and drop points, deploy technology to help the user navigate to Uber Zones and provide parking at ease to driver partners.