Chennai: The year 2016 has come out as one of the best in terms of performance parameters of the Indian hotel industry. All India occupancies rose by 2.4 points to 64.1 %, ADR (Average Daily Rate) by 2 %, and RevPAR (Revenue per Available Room) by 5.9%.
While Mumbai and Goa remain the only markets with occupancy above 70%, New Delhi and Pune have crossed 65%; further, Delhi-NCR, Bengaluru and Chennai have crossed 60 % with Hyderabad just below that mark. The RevPAR is highest in the last four years for half the cities - Mumbai, Bengaluru, Hyderabad, Pune, Ahmedabad and Jaipur.
Despite being touted as an all-time destination for foreigners, Goa has lost occupancy. Mumbai continues to deliver strong occupancies at 74.3%. However, hotels remain diffident on rates.
The stand-out markets are Chennai and Pune and both are recovering well from the supply surge in recent past years. Chennai has gained 8.6 pts occupancy since H1-13, in spite of the IT Corridor continuing to bleed. City centre hotels are expecting to gain rates and occupancy over the next 18 months, but the doubling of supply on OMR is a serious challenge - can the IT sector deliver stellar growth to debug this condition, remains to be seen.
Pune’s recovery has been more gradual compared to Chennai. Its supply surge significantly coincided with the downturn years rather than the recent 'hope' years. Occupancy grew 8.2 pts over H1-14, and was supported by 1.3% ADR increase.
According to Indian Hotel Review Report -2016 released by Horwath HTL for STR Global, despite the demand slowdown in the last 45 days of the year on the back of the demonetisation drive by the government, the year has been the best since 2007 in terms of occupancy, ADR, and RevPAR.
All India occupancies rose by 2.4 points to 64.1%, ADR by 2%, and RevPAR by 5.9%. All India demand grew 12.5% and may have gone higher, but for a clear decline in the last 45 days. Occupancies for all key markets crossed 60% and marginally crossed the 70% mark in two markets in 2016, the report notes.
