HVS India – The Indian hotel sector – 2021 review

India’s hospitality sector has demonstrated resilience again in 2021, navigating uncertainty, adapting to an ever-changing environment and persevering through the ups and downs on the rocky road to recovery building on lessons learned the previous year. Read on to find out more.

The year 2021 has been nothing short of a roller coaster for the Indian hotel industry. Throughout the year, the sector has shown resilience by navigating uncertainty, adapting to an ever-changing environment and persevering despite the ups and downs on the rocky road to recovery. The upside is that the leisure segment, which was ignored in the past, is now getting the attention it deserves.

After a hectic 2020, 2021 has started off on a promising note, with people starting to travel for short breaks, weekend getaways, breaks, working vacations and more. encouraged by a steady decline in active COVID cases and the launch of the country’s COVID vaccination campaign. Growth in domestic leisure tourism has helped occupancy rate across the industry reach nearly 50% in the first quarter of the year, the highest level since the start of the pandemic. However, as demand increased, new restrictions and lockdowns in several states, imposed in response to the more devastating second wave of the pandemic, took the industry’s breath away.

A proactive approach helped hoteliers weather the storm.
The first wave caught the industry off guard, with most hotels shutting down or relying solely on quarantine activity. However, for the second time, hoteliers have proactively focused on alternative customer segments and ancillary revenue sources to weather the storm, building on lessons learned from the previous year. For example, to improve occupancy at the peak of Wave 2, some hotels, especially in shopping malls, have partnered with hospitals to provide isolation and quarantine facilities.

As the vaccination campaign in India gained momentum and the second wave began to subside, people began to travel again to escape the lockdown blues and work-from-home fatigue. Additionally, limits on overseas travel meant that several Indians overseas also began vacationing in the country. As a result, weekend getaways to motorized recreation spots and “stays” at luxury properties in cities have grown in popularity. Hoteliers thought out of the blue to create various weekend, stay, vacation, wellness and dining packages to appeal to a variety of customer segments – frontline workers, couples, multigenerational families, couples with young children. , groups of friends, business travelers, and so on – some even introducing pet-friendly policies to attract pet parents.

The operational agility of the sector tipped the scales in its favor, allowing it to quickly tap into pent-up demand. Major leisure markets such as Goa, Rajasthan, Uttarakhand and Himachal Pradesh are leading the recovery of the Indian hotel sector, with Goa even surpassing pre-pandemic performance levels towards the end of the year.

The Indian hotel sector is regaining ground faster than expected.
As the year draws to a close, business travel has started to experience green shoots, with most industries returning to a full or hybrid work model, helping to improve hotel occupancy in city centers. business too. High vaccination rates, a decrease in new cases and reduced travel restrictions across states have all contributed to this recovery. Weddings and social events have also driven demand in some markets. In addition, after a hiatus of almost two years, small to medium-sized national MICE events are making a comeback, fueling demand for hotels. As a result, India’s hotel industry has recovered faster than expected, although growing concerns over Omicron, and the resulting increased travel restrictions, dampened morale slightly at year-end. It could also mean a difficult start to 2022 for the industry, although it is hoped that the negative impact of the Omicron variant will be short-lived. In any case, hoteliers must continue to remain agile, adapt, innovate and seize opportunities, while ensuring that safety standards are not compromised by employees and guests, even when the business is booming, so Omicron or any variant is just a dud. on radar as waves of COVID-19 continue to rock the salvage boat.

Mandeep S. Lamba, President – South Asia, oversees HVS practice in South Asia. Mandeep has spent over 30 years in the hospitality industry, having worked with international hotel companies such as Choice Hotels, IHG and Radisson Hotels before becoming President of ITC Fortune Hotels in 2001. Having successfully built the Fortune brand in the mid-range hospitality sector in India, Mandeep has ventured into an entrepreneurial adventure for over 8 years, forming JV companies with Dawnay Day Group UK and Onyx Hospitality Thailand before joining JLL in 2014, as Managing Director, Hotels & Hospitality Group – South Asia. An established industry leader, Mandeep has won several awards and accolades for his accomplishments. Recently, it was named to Hotelier India Power’s Most Respected Hoteliers in India list for the second year in a row. Contact Mandeep at +91 981 1306 161 or [email protected]

Dipti Mohan, Senior Manager – Research with HVS South Asia, is a seasoned knowledge professional with extensive experience in creating research-based content. She is the author of several ‘point of view’ documents such as thought leadership reports, expert opinion pieces, white papers and research reports. Contact Dipti at [email protected]

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© 2021 Hotel News Resource


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Christina A. Kroll