The hospitality sector continued to witness year-on-year (YoY) growth in performance in Q2 2024 (April–June 2024), primarily driven by a rise in Average Daily Rate (ADR), resulting in a RevPAR growth of 4.8%. The second quarter recorded a dip in occupancy levels, which can be attributed to the onset of summer vacations and a subsequent decrease in corporate travel. Due to this, the sector also noted a dip in RevPAR growth of 15.9% Q-o-Q in Q2 2024, compared to Q1 2024. This can be attributed to the second quarter of the year typically being the lean season for the sector with reduced corporate travel, according to JLL’s Hotel Momentum India (HMI) Q2, 2024.
Apart from a slight decrease in Goa’s average daily rate (ADR), all other markets (Bengaluru, Chennai, Delhi, Hyderabad, and Mumbai) showed considerable growth in ADR and revenue per available room, with Hyderabad leading the list. Although occupancy levels remained relatively stable in Q2 2024 compared to Q2 2023, ADR levels improved, leading to an increase in RevPAR across all markets, excluding Goa.
The upcoming quarter is anticipated to benefit from the resurgence of corporate travel, festivals, and other corporate and social events. The industry’s strong momentum and sustained domestic demand for business travel and corporate, social, and MICE events will drive a busy season.
Q2 2024 recorded 82 branded hotel signings, comprising 9,732 rooms. Furthermore, 15 hotels signed were conversions of other hotels, accounting for 11% of the inventory signed in Q2 2024. Branded hotel openings comprised 50 hotels with 3,755 keys, of which 90% of the total number of keys were located in tier two and tier three cities, including Tirupati, Udaipur, Thane, and Mysore, to name a few.
Hyderabad emerged as the RevPAR growth leader in Q2 2024, registering a growth of 11.9% over Q2 2023, followed by Delhi and Bengaluru, with YoY growth of 11.8% and 10.4%, respectively. “Backed by the strong performance of hotels across India, we continue to see investors moving money in this asset class. There is strong momentum for greenfield developments and operating assets across business and leisure markets. Although the summer season has brought down corporate room-night demand in Q2 2024, the sector continued to demonstrate growth in average daily rates (ADR) compared to Q2 2023. Looking ahead, the sector’s performance in the upcoming quarters appears promising due to the upcoming festival season, the general rise in domestic corporate travel, and the return of MICE events, weddings, and other social gatherings,” said Jaideep Dang, Managing Director, Hotels and Hospitality Group, India, JLL.
