JLL Report: Indian Hospitality Sector Thrives with 14.6% Increase in Average Daily Rate in Q4 2023
by EVENTFAQS Bureau Industry Watch | February 12, 2024 | News
JLL Indian Hospitality Sector
The Indian hospitality sector continued to experience year-on-year growth in performance in Q4 2023, driven primarily by a substantial increase in the Average Daily Rate (ADR) of 14.6 percent, compared to Q4 2022, according to JLL's Hotel Momentum India (HMI) Q4 2023 report released on February 9.
According to the report, the sector witnessed a significant growth of 31 percent in revenue per available room in Q4 2023, compared to Q3 2023.The fourth quarter saw consistent growth in average daily rates due to factors such as weddings, corporate and social MICE events, leisure travel, and year-end festivities, as per the report.
The report stated, "Amid stable occupancy levels, the six markets have demonstrated strong ADR performance, benefiting from sustained corporate demand and international events such as the ICC Cricket World Cup, as well as the wedding season. Hyderabad led in terms of ADR growth with 24.7 percent, followed by Delhi and Mumbai at 20.3 percent and 16 percent, respectively.”
As per JLL, the momentum from the last quarter is expected to carry into 2024, supported by the wedding industry, corporate and social MICE demand, and the growing significance of niche tourism categories like religious tourism.
Business travel is also anticipated to rebound by the end of the first quarter of 2024 as companies hold their year-end meetings. The industry shall remain robust, driven by ADR growth, strong domestic demand fuelled by higher disposable incomes, and targeted government initiatives.
In Q4 2023, a total of 82 hotels comprising 8,741 keys were signed. Among these, 15 hotels were conversions of existing properties, accounting for 14 percent of the total signed inventory in Q4 2023. Bengaluru emerged as the leader in RevPAR growth in Q4 2023, achieving a substantial 31.9 percent growth compared to Q4 2022. Delhi and Hyderabad followed closely with year-on-year growth rates of 26.3 percent and 23.5 percent, respectively.
Jaideep Dang, Managing Director, Hotels and Hospitality Group, India, JLL said, “As 2023 ends on a high note, the hotels industry is at the precipice of a fundamental shift in its growth trajectory. With the rising relevance of key trends such as pilgrimage tourism, airport and complementary developments, and infrastructural upgrades, we are witnessing an increased interest from hotel developers and investors who wish to participate in this growth story. We expect the sector to continue witnessing strong ADR levels on the back of softening of supply pressure, rising disposable incomes and increased air connectivity.”
According to the report, the sector witnessed a significant growth of 31 percent in revenue per available room in Q4 2023, compared to Q3 2023.