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Hotel industry revives in Goa; average occupancy rises to 55% from 15%

Last year was particularly bad for the hospitality sector. The destruction caused by the pandemic led to a sharp decline in revenues and occupancies across the sector

twitter-logoManu Kaushik | February 23, 2021 | Updated 16:36 IST
Hotel industry revives in Goa; average occupancy rises to 55% from 15%
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Goa stood out as the most solid market in hospitality sector in September-to-December 2020 period. The market saw marked improvement in both occupancies and room rates, says the latest Hotel Momentum India report by consultancy JLL. In third quarter, hotels in Goa were running at an average occupancy of 15 per cent. This figure jumped to nearly 55 per cent in the fourth quarter. Similarly, the average room rates swelled from about Rs 4,500 to nearly Rs 7,000 per night. Other major markets like Delhi, Hyderabad, and Mumbai registered improvement in occupancies too while Chennai and Hyderabad saw increase in average room rates in the last quarter of CY20.

Last year was particularly bad for the hospitality sector. The destruction caused by the pandemic led to a sharp decline in revenues and occupancies across the sector. As per STR, a hospitality-focussed analytics firm, India's hospitality industry registered 54.9 per cent drop in RevPAR (revenue per available room) in 12 months to December 2020 in comparison to the same period in 2019. RevPAR is a performance metric derived by multiplying a hotel's average room rate by its occupancy.

But the last quarter of CY20 witnessed improvement in select markets.

The report highlights that some 23 branded hotels were opened in three months to December consisting of 2,262 keys whereas 45 new signings (consisting of 4,326 keys) have happened during the same period. At 45, the number of new signings was down by 43.6 per cent as compared to the same period last year.

Interestingly, the midscale and upscale categories have seen the most traction in the last quarter. For example, in terms of openings, 11 midscale hotels were opened in Q4 CY20 as compared to five in upscale, four in upper upscale, two in luxury, and just one in budget segment. Also, most new hotel sign-ups took place in the midscale segment (22 properties) followed by upscale (12), upper upscale (4), luxury (4) and budget (3) segments, shows the JLL report.

In terms of location break-up, the maximum action is happening in the tier-II and -III cities. For instance, the most openings in Q4CY20 took place in tier-II cities (10 properties) followed by tier-I (7) and tier-III (6) cities. But the maximum number of new branded hotel signings was witnessed in tier-III cities (20 properties) followed by tier-II (15) and tier-I (10) cities.

Contrary to the general perception, the report also says that the operational hotels supply (both branded and independent) in India as on December 2020 (3,05,600 keys) is actually more than the total comparable supply (3,01,068 keys) at the end of 2019.

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