India's Hospitality Sector Thrives in Q3 2024, Surging on Corporate Demand and MICE Events

India's hospitality sector recorded a 10.8% RevPAR growth in Q3 2024, fueled by increased corporate travel and strong ADR performance. Major markets like Hyderabad led with remarkable growth, while new hotel openings in Tier II and III cities expanded the inventory. The robust Q4 outlook is supported by festive and corporate activities.

In the third quarter of 2024, India's hospitality industry sustained its growth momentum, as evidenced by a significant 10.8% year-on-year increase in Revenue Per Available Room (RevPAR), according to the Hotel Momentum India (HMI) Q3 2024 report by JLL. This uptick was primarily a result of boosted Average Daily Rates (ADR), which saw a modest 2% quarter-on-quarter rise when compared to the preceding quarter, Q2 2024.

The increase in corporate travel activities, a cyclical trend during this period, greatly influenced the sector's upward movement. Hyderabad stood out with an impressive 23.6% rise in YoY RevPAR, leading major city markets. Chennai and Mumbai followed, reporting 17.7% and 16.8% YoY RevPAR growth, respectively. Despite slight decreases in ADR in both Delhi and Goa, other prominent cities like Bengaluru, Chennai, and Mumbai witnessed robust growths in both ADR and RevPAR metrics. Stable occupancy levels further supported the RevPAR increases across these locales.

Business travel demand, bolstered by Meetings, Incentives, Conferences, and Exhibitions (MICE) events, was key to the sector's performance. Noteworthy developments in Q3 included the signing of 96 branded hotel contracts, incorporating 10,686 rooms to the available inventory, with 12 conversions accounting for an 11% increase. The opening of 30 new hotels added another 1,988 keys, with the majority located in Tier II and III cities like Tirupati, Udaipur, Ranchi, and Mussoorie. The forecast for Q4 2024 remains optimistic, underpinned by festive seasons and a resurgence in corporate travel, as well as strengthening in MICE, wedding, and social event activity. Jaideep Dang, Managing Director at JLL, noted that despite a seasonal dip in corporate room demand, the sector showed robust growth in ADR and remained attractive to investors, signaling promising future performance driven by social and corporate events.

(With inputs from agencies.)