HVS Monday Musings: Indian Hotel Sector – 2021 Performance Review

This article briefly discusses the Indian hotel sector's performance in 2021.
Mandeep S Lamba Following an abysmal performance in 2020, the Indian hotel sector found some much-needed hope in 2021, as it made steady headway on the road to recovery. The year began on a promising note with the commencement of the vaccination program, which, combined with a decrease in COVID cases, improved travel sentiment in the country. Domestic leisure travel drove the recovery throughout the year, with business travel also picking up as most businesses and organizations returned to a full or hybrid work-from-office model. Additionally, weddings and social events, as well as the resurgence of small-to-medium-sized domestic MICE events, helped to stimulate hotel demand in 2021.

While there was significant recovery, the year was not without pandemic-related setbacks, as the emergence of new COVID variants acted as temporary roadblocks in the sector’s recovery. Travelers and hospitality sector players, however, continued to adapt to the evolving situation and found new ways to move forward. As a result, the sector ended the year with an India-wide occupancy of 42-46%, up 8-12 percentage points over the previous year.

Driven by the strong recovery in demand, average rates began to improve after the second wave, progressively approaching pre-COVID levels. While average rates for the year were in the range of INR4,300-4,600, rates in the fourth quarter of the year were in the region of INR5,300-5,500, almost reaching 90% of pre-COVID levels, giving the sector renewed confidence in the bounce back. Meanwhile, RevPAR increased by 24-27% to reach INR 1,800-2,100 in 2021. Goa recorded the highest RevPAR in the country in 2021, while Chandigarh had the maximum RevPAR growth.

The year 2022 has started on a challenging note, as demand has been subdued because of the rising Omicron cases in India, and the accompanying travel constraints across states. However, this is merely a temporary stumbling block, and we expect a strong comeback in domestic travel as soon as the cases subside, and travel limitations are lifted.
Mandeep S. Lamba, President – South Asia, oversees the HVS global hospitality practice for South Asia. He has spent over 30 years in the hospitality industry of which the last 19 have been in CEO positions. Having worked with leading International and domestic Hotel Companies such as IHG, Radisson & ITC Hotels, he also set up joint venture companies with Dawnay Day Group UK and Onyx Hospitality, Thailand to own and operate hotels in India giving him a broader exposure to the hospitality business.
An established industry leader, Mandeep has won several awards and recognitions in India and abroad for his accomplishments and contribution to the hospitality industry. He is a Certified Hospitality Administrator from the American Hotels Association (CHA), a member of the Royal Institute of Chartered Surveyors, UK (MRICS) and a member of the Tourism Council of CII (Northern India). His views are often solicited for television and print media as a spokesperson for the hospitality & tourism sector.
Prior to joining HVS in 2018, Mandeep was the Managing Director, Hotels & Hospitality Group for JLL. 

Contact Mandeep at +91 981 1306 161 or [email protected]

About Dipti Mohan

Dipti Mohan, Associate Vice President - Research with HVS South Asia, is a seasoned knowledge professional with extensive experience in research-based content creation. She has authored several ‘point of view’ documents such as thought leadership reports, expert opinion articles, white papers, and research reports across industries including hospitality, real estate, infrastructure, cement, and construction. Contact Dipti at [email protected]


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