India-wide occupancy of hotels to increase to 66% in 2023: Report

India’s hospitality sector is on its way to a full recovery post the Covid-19 pandemic that crippled it. As per a new report, ‘India Hospitality Industry Overview 2022’ by HVS ANAROCK, the industry ended 2022 with occupancy in the 59-61 per cent range, up 15-17 percentage points (pp) from the previous year and only 5-7 pp lower than the full year 2019. However, average rates (ARR) recovered fully in 2022, crossing 2019 levels by nearly 1-3 per cent and being 37-39 per cent higher than 2021 levels. As a result, RevPAR in 2022 increased by 89-91 per cent over the previous year and was only 7-9 percent lower than in 2019.

Driven by a strong recovery in demand, hotel companies accelerated their growth plans in 2022, resulting in over 33 per cent increase in brand signings by keys over the previous year. 166 new hotels with 14,885 rooms were signed during the year, while 90 hotels with 5,702 rooms were rebranded. Hoteliers continued to expand their portfolios in leisure destinations as well as Tier-3 and -4 cities, recognising the enormous untapped potential in these areas.

The start of 2023 has been promising, and the Indian hospitality industry's outlook remains positive. Domestic demand will remain strong, and international travel will increase, despite the threat of a recession in the United States and Europe, growing global geopolitical issues, and an increase in Covid-19 cases in some countries. Furthermore, India's G20 presidency and the fact that India is hosting a number of international events, including the ICC Men's World Cup, will increase demand for hotels in the cities where these events will be held.

“We expect India-wide occupancy to improve to 66 per cent in 2023, which coupled with a 16-17 per cent increase in ARR will push RevPAR to 4,690 during the year, almost 18 per cent higher than the pre-pandemic RevPAR recorded in 2019,” says Mandeep Singh Lamba President (South Asia) HVS ANAROCK.