The recovery in hotel performance in India resumed in early 2022, but April appeared to be the turning point, with the country outperforming pre-pandemic comparables in occupancy and average daily rate (ADR) for three consecutive weeks.
Leisure markets continued to lead the recovery, but business travel is also back in the country after Omicron. Forward bookings also appear to be healthy for the rest of May, with most pick-ups remaining short-term.
20 consecutive days above pre-pandemic comparables
7-day occupancy and ADR had reached 90% or more of 2019 levels since the end of March, with occupancy eclipsing pre-pandemic levels as early as March 23. From April 16, however, the country would see its first of 20 consecutive days with both occupancy and ADR beating 2019 comparables.
Using preliminary 20-day sequence data, the 7-day occupancy in absolute terms ranged between 65-72%, while the 7-day ADR ranged between INR 6325-6484.
Leisure markets continue to lead the recovery, but business travel is back
India‘s most popular leisure markets, such as Himachal Pradesh, Goa and Uttarakhand, have seen significant occupancy levels throughout 2022, mostly exceeding pre-COVID-19 levels. pandemic. However, the months following Omicron’s peak generated significant demand with improved traveler confidence and an easing of interstate travel restrictions.
Business demand, which was limited after the Delta wave, showed a significant improvement after Omicron with an acceleration in late April and early May. Not only have businesses resumed travel, but MICE demand is also returning.
Bengaluru and Pune, cities that historically depend on this segment, have been among the hardest hit by lack of business demand throughout the pandemic, but are now among the markets with the fastest growing demand. Mumbai recorded over 80% occupancy almost every day in April 2022.
While business markets in India are maintaining ADR levels amid rising occupancy, leisure markets are taking advantage of additional demand to boost premiums. Hotels in Himachal Pradesh and Uttarakhand managed to at least double their rates compared to 2019.
The ongoing 7-day ADR for India has been above pre-pandemic levels since mid-April and continues to grow gradually.
Look forward via STAR front, hotel bookings in India are at solid levels. Pickup, the difference in bookings from one weekly reporting period to the next, shows a trend towards shorter booking windows. This trend is common in many global markets following the pandemic.
An element of STR benchmarking, Forward STAR completes the picture and adds to a hotelier’s historical view of future demand trends and changes in bookings affecting their market. The recent expansion of STR’s Forward STAR holding includes New Delhi, Chennai, Goa and Gujarat.
STR provides premium benchmarking data, analysis and market intelligence for the global hospitality industry. Founded in 1985, STR operates in 15 countries with North American headquarters in Hendersonville, Tennessee, international headquarters in London, and Asia-Pacific headquarters in Singapore. STR was acquired in October 2019 by CoStar Group, Inc. (NASDAQ: CSGP), the leading provider of online commercial real estate information, analysis and marketplaces. For more information, please visit str.com and costargroup.com.