The hospitality industry in India is experiencing significant growth, particularly in Tier-2 and Tier-3 cities, driven by increased domestic travel post-pandemic. This growth has led to a demand-supply gap, with hotel rooms becoming scarce in these areas. The surge in travel infrastructure and disposable income has fueled this growth and is expected to continue for the next decade. As a result, hospitality companies must customize their products to meet the evolving preferences of Indian travelers in order to thrive in a competitive market.
Signum Hotels and Resorts CEO and founder, Mehul Sharma, discusses the demand-supply gap in India’s hospitality market and the rise of religious tourism as a strong investment opportunity. Sharma emphasizes the need for sustainability measures in hotels, such as solar energy and water treatment plants, to address this gap and ensure long-term success. By following sustainability best practices and hiring local talent, Signum is able to promote sustainable tourism practices while meeting the growing demand for hospitality services in emerging destinations in smaller cities.
The development of highways and airports in Tier-2 and Tier-3 cities has made these areas more accessible, leading to higher occupancy rates and profitability for hospitality businesses. Sharma highlights the potential of religious destinations like Ayodhya and Vrindavan, which attract consistent visitor numbers year-round and offer attractive investment opportunities. By offering services that cater to the needs of religious tourists, including proximity to temples and vegetarian menus, hospitality companies can capitalize on this growing market segment.
Indian travelers are increasingly opting for shorter, spontaneous trips post-Covid, prompting hospitality companies to adapt their offerings to cater to these preferences. Luxury experiences, farm-to-table dining, and local cultural activities are becoming more popular, and hotels need to incorporate these elements into their services to attract and retain guests. Additionally, managing serviced apartments is seen as a more cost-efficient and profitable option compared to traditional hotels, catering primarily to corporate clients with extended stays.
Signum Hotels has expanded its portfolio from eight to 12 properties post-Covid, with four more in the pipeline, signaling its commitment to sustainable growth and meeting the changing needs of travelers. Sharma emphasizes the importance of green initiatives and local talent engagement to avoid over-tourism and ensure a positive impact on the environment and local communities. By balancing serviced apartments with traditional hotels, hospitality companies can offer guests a range of options and maximize profitability while providing exceptional service and comfort. Adaptation to new traveler patterns and preferences is key to success in the evolving Indian hospitality market.
