Opportunities for the Indian hospitality industry after the pandemic


Revenge travel, revenge tourism, pre-festive vacations, confinements after the first flight, incredible India! That’s what we always hear, isn’t it? Before the end of the year holidays, holidays and hotels are waiting for you!

In fact, not only with us, but also in the spirit of scholarships! Most hotel stocks have hit near all-time highs, with some looking to go public as well. From Oberoi to OYO, everyone wants a piece of the Indian travel cake.

So let’s calculate the numbers and define the opportunity for the Indian hospitality industry.

The global short-stay market is currently around a trillion dollars, impacted in 2021 by COVID-19. However, it is expected to double to nearly $ 2 trillion by 2030. In this framework, the Indian market is expected to grow 5 percentage points faster at 13% than the global market at 8%.

According to several estimates and some envelope calculations, the Indian hotel industry was around Rs 80,000 crore in 2020, before the pandemic, a jump from nearly Rs 50,000 crore in FY15. However, with a massive drop in FY21, it is expected to recover to almost Rs 70,000 crore over the next 2 years.

We have around 1.46 lakh of hotel rooms in India as of fiscal 21, this number is also expected to approach 1.8 lakh crore over the next 5 years, almost 30% more.

Achin Khanna, Managing Partner of Hotelivate, said: “Demand has actually eroded considerably over the past fiscal year and this was an unusual event to say the least. But it has already come back to a good extent in recent months. To give you an idea, as the occupancy rate fell almost 50% in FY21, we are seeing occupancy rates in most leisure markets closer to the 60% mark. This year. In some urban markets, already exceeding the 50 percent threshold. So you see a recovery from a demand point of view, I think a more holistic and healthy recovery is not on the agenda just yet and we believe that should happen by the exercise 23. “

Online hotel penetration is expected to increase from 33% in 2020 to 50% in 2025, this is an important growth trigger given the growing growth of the internet economy in India.

Remember that 92% of India’s hotel industry still doesn’t have a brand. Consumers began to prefer the comfort of branded hotels after the pandemic.

The appetite for quality sourcing has grown in recent years as the concentration of stocks in India’s top 10 cities has shrunk and spread to many newer and smaller cities, and this trend is expected continue. This corresponds to the increase in air passenger traffic in small towns as well.

The big moment in the hospitality world came with the rise of the internet and the birth of technology-based hotel solutions like online travel sites, global aggregators like Airbnb, our own OYO, SaffronStays, Vista Rooms and many others.

Archana Ram, VP – Real Estate & Devt, Indian Hotels said, “I think through the pandemic we’ve seen a lot of new avenues for our business. We’ve had revenge trips, we’ve had staycation, we’ve got Bizcation, and we’ve also had our entire foster family segment, which is “Ama” that we launched right before the pandemic really took off. Having said that, of course, leisure has been predominant in this time of the pandemic. But we expect business travel to return to pre-pandemic levels as well. But what’s going to be very encouraging is that the pandemic has opened up a whole new avenue of income and we are seeing that continue even beyond the pandemic. So in addition to your traditional sources of income, you now have additional sources of income.

Devendra Parulekar, Founder of Saffron Stays, said: “This company has always been limited by supply. Before COVID, no one invested in a second home because they were never sure whether that home would be maintained, managed, monetized. But now, after COVID, I think what has happened is that the credibility of players like us has given these investors a lot of stability and confidence. That’s why the supply that’s going to come in is absolutely fantastic. This is not an old renovated house, it is a high quality, good quality supply coming in.

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Christina A. Kroll

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