The 2018 Indian Hospitality Trends & Opportunities Report
Everything will be just fine. Don’t panic, do not hyperventilate and just take long, deep breaths. You are missing out on nothing! Trust me, that RFP account is going nowhere. Your competitor’s sneaky attempt to further drop locally negotiated rates will not lead to your hotel shutting down. The sun will indeed rise tomorrow, and you will live to fight another day. You are doing a great job, your hotel deserves to charge more, and apocalypse hasn’t struck yet.
Before you dismiss my statements as an attempt to chide or disparage the hard work that every hotelier puts in every day, please indulge me with a patient read ahead. The truth of the matter is that scores of hotels are operated under the perennial belief that they have no option but to offer lower room rates (if they want higher occupancies). It appears to have become the draconian truth that average room rate must be inversely proportional to occupancy. There is this ‘fear of missing out’ (FOMO, as the millennials would call it) on the opportunity to fill guestrooms that looms constantly on the minds of most hotel operators in India. Yes, room nights are a highly perishable commodity. I agree that inventory left unsold today is an opportunity lost forever and the need to put heads in beds is palpable. However, little to no heed is paid to the long-term damage we are doing to our businesses in a bid to win the short-term battles.
This year’s Trends & Opportunities report comes to you on the heels of a brawny performance by the sector across positioning, geographies and price points. The demand-supply equation continues to unveil opportunity for higher occupancies across most hotel markets in India. Yet, 2017/18’s nationwide ARR inched ahead by a mere 1.5% over 2016/17. Research reveals that more hotels than ever before are consistently mitigating the effects of seasonality by multifarious segmentation. If anything, this should empower them to augment their ARR strategy, not curtail it.
Hotelivate, a comprehensive hospitality consulting firm offering specialised services to clients across the Asia Pacific region, is proud to present the results of The 2018 Indian Hospitality – Trends & Opportunities Report. The current participation base of 1,020 hotels is nearly a ten-fold increase over the first such industry report conducted a little over two decades ago. This wider base with 1,28,163 rooms is justifiably more representational of the organised segment of the Indian hotel industry, enabling better incisive analyses of national trends, performance of major hotel markets and demand and supply forecasts than any other survey of a similar nature.
The results of the Trends & Opportunities Report have been presented in this report at an All-India level, by star category and by 13 major hotel markets, indicating the best and worst performers and identifying reasons for the same. Furthermore, a detailed review of existing and future supply has been conducted at macro and micro levels to facilitate a better understanding of the remarkable growth in the number of branded rooms in the country across positioning. We have also offered additional perspective and insights within various sub-sections of this report for those seeking a deeper analysis of the demand-supply dynamics as well as future trends and opportunities in a rapidly evolving marketplace. Preceding the discussion of survey results is a brief review of the performance of the Indian economy in the past fiscal and that of the tourism sector, in particular, which have a direct bearing on the health of the Indian hotel industry.