Hotel occupancy declines during holiday season: JLL

Chennai: With Jet Airways grounding its aircrafts, followed by a long election season and travellers opting for overseas travel, occupancies across hotels in key cities has seen a decline, said a report.

The JLL Hotels and Hospitality Group’s half yearly report noted that the decline in occupancies was more visible in key cities including Goa, Jaipur, Pune and Ahmedabad. However, it noted that upwardly stable average daily rates (ADR) has helped the hotels to maintain momentum during these first six months.

Nine out of the top 11 markets in the country witnessed a marginal rise in revenue per available room (RevPAR) during this period, the report said.

In RevPAR percentage terms, as compared with the corresponding period the last year, Hyderabad ranked on top. Bengaluru and Gurugram followed, with the cities claiming second and third rank, it said. Mumbai, however, is the RevPAR leader in absolute term.

“First three months of the year (January to March) continued to perform well on back of winter season, which is conducive for leisure travel into India. Business travel also remained strong. But subsequently, problems relating to Jet Airways and a long election season (April to June period) forced travellers to change or defer their travel plans,” said Jaideep Dang, managing director of JLL India’s Hotels and Hospitality Business.

“Last-minute flight cancellations and expensive re-ticketing forced people to look at alternative economical international destinations. This impacted the performance of cities such as Goa and Jaipur, and also business markets such as Pune and Ahmedabad. Despite these challenges, top cities have performed decently during the first six months of the year,” he added.

“We expect the room rents to remain stable in the future. Few cities, however, which are high on tourism radar and are business-wise important, are likely to see an upward movement in rents. This trend is likely to keep the performance and growth of the sector intact in coming quarters too,” Jaideep Dang stated.

The report further said the country has seen a rise in branded hotel signings in the first six months (January-June) this year. During the period, the country witnessed a total of 85 hotel signings, comprising of 8,612 keys. While budget brands looked promising in 2018, upscale and midscale hotel brands have contributed the maximum to the signings during the first half of the year, according to the half-yearly update.

“Despite the fact that real estate market in the country is going through a difficult phase, new hotel signings suggest that there are businessmen and entrepreneurs from other trades who are investing in hotels given its long term potential,” said the MD of the firm.

Sector size
India’s hospitality sector has 2.72 million hotel rooms as of December 2018, across the country. It is estimated that the number will grow to 3.33 million rooms by 2023.

Hospitality consulting firm Hotelivate came up with the numbers in its report titled ‘The Ultimate Indian Travel & Hospitality Report’, released in association with the WTTC II and CAPA India.

These rooms operate across branded/traditional hotel chains like Indian Hotels Company Ltd, Marriott International, ITC Hotels; new-age hotel chains like OYO Rooms, Treebo, Fab Hotels; independent or unbranded hotels and alternative accommodation that include guest houses and residential properties.

The report said independent/unbranded segment constitutes 72 per cent of the hotel rooms in India.

The growing popularity of homestays, along with guest houses, makes alternative accommodation the second largest room unit category in the country at 15 per cent. Traditional hotel chains that dominated the organised sector in the past, now constitute only five per cent of the total rooms in India, while new age hotel chains, with their highly scalable models, constitute eight per cent, said the report.

NT Bureau