Amid reports of increasing demand for travel for the upcoming festive season, Skift reached out to travel services companies to understand the trends in festive season travel.
Factors Driving Growth in India's Hotel Industry - India Report
05.09.2024 - 09:30 / skift.com / Mark Hoplamazian / Peden Doma Bhutia / Puneet Chhatwal / Bulbul Dhawan
The Indian hospitality sector is set to grow at an annual rate of 10.5% over the next three years, according to the latest projections by trading services firm Axis Securities. The growth is expected to be driven by domestic travelers, foreign visitors, and the MICE (meetings, incentives, conferences and exhibitions) segment.
The report estimates that the hotel industry in India consists of about 212,000 rooms, with a market size of INR 820 billion ($9.76 billion).
Axis Securities highlights several factors that will contribute to the growth of the sector:
“These factors are expected to remain sustainable over the next three years and will significantly drive sector growth,” the report said. Tier-2 and Tier-3 cities are also boosting demand, experiencing an annual growth rate of 13%, with supply growth in these regions hovering around 10%.
The report, however, took a cautious and stable approach for the industry as the market size is growing faster than the rate at which industry leaders are adding new rooms. It said that even though about 18,000 rooms were added every year on average, the six leading players in the listed space only accounted for 30% of this growth.
However, hospitality executives like Accor’s Sébastien Bazin and Hyatt’s Mark Hoplamazian are looking at this demand-supply gap as a positive attribute.
Indian Hotels Company (IHCL) has announced the opening of Gateway Bekal. The 151-room full-service upscale hotel is located in the southern state of Kerala. This marks the launch of the Gateway brand.
The hotel chain had announced its decision to bring back a reimagined version of Gateway in April this year. IHCL CEO and managing director Puneet Chhatwal had then said that the brand would capture growth opportunities in emerging markets in metros and Tier 2 and Tier 3 cities.
At the opening of Gateway Bekal, Chhatwal said, “The brand roll-out commences with the opening of Gateway Bekal along with the migration of four operating hotels in Nashik, Coonoor, Madurai, and Chikmagalur. The current brand portfolio of 17 hotels will scale to 100 hotels by 2030.”
Despite a 44% increase in foreign arrivals in 2023, India has not fully recovered to 2019 levels, which is not even close to the country’s true potential in tourism. In the latest episode of Skift India Travel Podcast, my colleague Peden Doma Bhutia spoke to Dipak Deva, managing director of Travel Corporation India about the challenges and opportunities shaping the future of inbound tourism.
Lack of effective promotion by the Ministry of Tourism is the primary factor holding back inbound tourism, according to Deva. He stressed the need for a well-thought-out strategy and significant budget for global promotion to capitalize on
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