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Friday, 08 February, 2019, 13 : 00 PM [IST]

Delhi and Pune joined the +70% occupancy league with Mumbai in 2018: India Hotel Market Review 2018

Bengaluru, Pune and Delhi register highest ADR growth in 2018
As per the annual India Hotel Market Review 2018 report released jointly by STR and Horwath, Delhi and Pune joined Mumbai, the only city in India to cross the 70% hotel occupancy.  Delhi, the report says, has ‘grabbed the opportunity presented by GST replacing a usurious luxury tax with both hands’, and as a result performed well in all the performance parameters like Occupancy, ADRs and RevPAR.  The occupancies reached 71.7% accompanied by 7.5% growth in ADR and 11.6% growth in RevPAR, which is highest amongst Indian cities.  Pune, on the other hand, had a good year in 2018, crossing 70% Occupancy and pushing through over 7% ADR growth to post 11% RevPAR increase.  

At all India level in 2018, occupancy was the highest for the last 10 years; ADR the highest since 2012, the India Hotel Market Review reports.  RevPAR for Mumbai, Hyderabad, Pune and Jaipur was the highest of the last 10 years; for Ahmedabad, Bengaluru and Delhi, it’s the highest since 2010, 2011 and 2012 respectively. On average, 90k rooms were sold per day by hotels in India.

Among cities, Bengaluru now has the largest inventory crossing 14,000; as a metropolitan area.  Chennai is on the threshold of being the fourth city to cross 10,000 room mark in 2018. While Bengaluru dropped occupancy due to continued supply addition, its RevPAR crossed 4k for the first time since 2010, the report notes.

Among the 13 cities from which data has been compiled, Delhi registered the highest RevPAR change year on year at 11.6%, followed by Pune 11.1% and Hyderabad 8.6%.  Kochi and Goa had shown a negative growth in RevPAR, of 3.6% and 0.9% respectively.  The reason for negative growth in city of Kochi is attributed to reasons beyond the industry like scare of Nipah and the floods. 
Markets, other than the Key markets have increased supply share from 28% in 2014 to 33% in 2018. These are materially positioned at Up-UpMid and Midscale to Economy levels – a significant opportunity for brands positioned at these levels and with the ability to work smaller inventories (with F&B and banquet demand) particularly in tier 2 and lower markets.

The leisure sector remains under-served with only 19% inventory with potential for new investments in the segment.
As per the report room rate and occupancy positivity remained strong across all segments, highest being in the Midscale and Economy segment of the hotels at 6.62%.

F&B and banquets continue to carry significant revenue share, increasing even at lower-tier hotels. MICE and weddings will remain key business elements, although APC levels could harden in the near and medium term. The power of event-driven demand is now evident in more cities, the report notes. Ahmedabad gains from specific conventions and conferences, Bhubaneshwar gained from hockey and Kolkata from football.   

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