In the second quarter of 2024, India’s hotel industry saw significant growth with a nearly 40% increase in branded hotel room signings compared to the same period in 2023. Over 9,700 new keys across 82 branded hotels were signed during this time, and 50 hotels were opened. The focus remained on Tier-2 and Tier-3 cities, with Midscale and upscale hotels dominating the signings and openings. Revenue per average room (RevPAR) increased significantly in key markets like Bangalore, Chennai, Delhi, Hyderabad, and Mumbai, but declined in Goa. Despite this, Hyderabad experienced a significant increase in average daily rates, translating into a nearly 12% increase in the state’s RevPAR.
India’s hotel market has been described as underserved, with less than 200,000 branded hotel rooms compared to 3 million unbranded keys. The top five hotel operators in India collectively have less than 1,000 hotels, while in China, this figure is 25,000. The emergence of a middle class in India that seeks affordable accommodation presents an opportunity for significant growth in the sector, with a need to increase the number of hotels to meet demand. The supply of operational inventory in key markets increased by less than 1% while demand rose by 2.7%, indicating a positive attribute for the India market, according to Hyatt CEO Mark Hoplamazian.
Air India has introduced a wireless in-flight entertainment system called Vista for its older widebody fleet to provide passengers with entertainment on routes where new or retrofitted planes are not yet operational. Partnering with digital services provider Bluebox, Vista allows passengers to stream content on their personal devices through the Bluebox Wow wireless network system. This service will be in effect until the older fleet is retrofitted, while newly inducted widebody planes already have built-in entertainment systems.
Fortune Hotels signed an operating agreement for an upscale hotel in Gorakhpur, Uttar Pradesh, which is set to open in 2026. The hotel, Fortune Park Gorakhpur, will offer 74 rooms and is part of the group’s strategic alliances in the state. With plans to open a new hotel every month during the financial year, Fortune Hotels is optimistic about attracting diverse travelers due to increasing disposable incomes, a desire for unique experiences, and improved accessibility in the industry.
New South Wales is expecting double-digit growth in tourist arrivals from India this year, with a focus on increasing direct air connectivity between Sydney and India. The region saw over 181,000 Indian tourists in 2023, spending AUD 482.2 million and staying a total of 7 million nights. Positive factors such as rising disposable incomes, an increase in direct flights, and an easy e-visa application process are expected to drive further growth in tourism and footfalls in New South Wales.
In July, IndiGo regained its lost market share in India while other carriers like SpiceJet, Air India, and Air India Express reported a reduction. Full-service airline Vistara saw an increase in market share for the second consecutive month, indicating robust competition in the industry. Airlines are expanding their networks and offerings to cater to the growing passenger base in India, with IndiGo introducing a business class configuration and a loyalty program, Vistara offering free Wi-Fi on select flights, and Air India upgrading its fleet. Despite a slight increase in domestic passenger traffic in July compared to the previous year, the number of passengers in 2024 continued to decline from May to June.
