The latest HVS ANAROCK Monitor: November 2024 report reveals a dynamic but challenging landscape for India’s hospitality sector. While October 2024 saw a decline in occupancy rates across most cities, the industry experienced an encouraging boost in Average Room Rates (ARR) and robust growth in hotel signings, pointing to a cautiously optimistic trajectory.
Nationwide, October 2024 occupancy rates fell compared to both October 2023 and September 2024, signaling a demand dip. Chennai, Kolkata, and Mumbai saw the sharpest declines, with rates dropping by 3-5 percentage points. In contrast, Ahmedabad stood out with a 4-6 percentage point increase, thanks to Navratri-driven demand.
Despite occupancy setbacks, ARRs surged. Hyderabad led the way with a remarkable 21-23% year-on-year rise, driven by strong market demand. Jaipur and New Delhi also posted double-digit growth in ARRs, showcasing resilience even amidst occupancy challenges. Ahmedabad, however, reported a significant 30% drop in ARRs, attributed to last year’s inflated rates during ICC Cricket World Cup matches.
The report highlights a surge in branded hotel market signings, with 33,407 keys added across 333 properties by October 2024—a 45% year-on-year increase in keys signed. Notably, Tier 2 and Tier 3 & 4 cities contributed over 75% of the total signings, reflecting developers’ growing focus on emerging markets.
Greenfield developments dominated the pipeline, accounting for 43% of signings, followed by brownfield projects at 38%. This surge indicates renewed investor confidence in India’s hospitality sector post-pandemic.
By October 2024, 8,073 keys had been launched across 119 properties, with nearly half concentrated in Tier 3 & 4 cities. This trend underscores the rising prominence of non-metropolitan markets as key growth drivers, addressing regional demand for high-quality hospitality infrastructure.
The report also captures critical industry movements, including Indian aviation reaching a milestone of over 5 lakh domestic passengers in a single day, and Ahmedabad unveiling its first luxury river cruise—a ₹25 crore project aimed at boosting tourism.
Additionally, international partnerships are strengthening India’s tourism ties, with Russia set to offer visa-free travel for Indian passport holders by 2025.
While challenges like declining occupancy rates persist, rising ARRs, expanding hotel portfolios, and significant activity in Tier 3 & 4 markets indicate a promising future for India’s hospitality sector. Developers and operators are increasingly leveraging data-driven strategies to navigate fluctuating demand while focusing on sustainability and regional growth.
