Hospitality sector witnessed a 169.4% YoY rise in RevPAR in Q3 2021: JLL

Hospitality sector witnessed a 169.4% YoY rise in RevPAR in Q3 2021: JLL
Picture Courtesy : Lemon Tree Hotels

According to JLL's Hotel Momentum India (HMI) Q3 2021, a quarterly hospitality sector monitor, the hospitality industry in India grew by 169.4% in Revenue Per Available Room (RevPAR) during Q3 2021 (July - Sept) compared to Q3 2020. Furthermore, there was a 122.9% increase in RevPAR in Q3 2021 compared to Q2 2021 across India, owing to a substantial recovery in leisure demand when travel restrictions were removed following the second wave of the epidemic.

The sector's Year on Year (Y-o-Y) increase in Q3 2021 is mostly attributable to the low base effect of Q3 2020, when the country began to gradually lift travel restrictions. Following the full and partial lockdowns that occurred in numerous states between April and May of 2021, the leisure travel sector experienced a significant recovery towards the conclusion of Q2 2021. This trend continued into Q3 2021, when inter-state travel restrictions were lifted further and travellers' confidence improved as a result of the nation-wide immunisation programme.

Growth in travel is likely to continue for the next two quarters (Q4 2021 and Q1 2022), as India continues to increase vaccination rates, resulting in improved sentiment toward domestic travel, particularly business travel. IT / ITeS organisations have suggested that their travel expenses may rise in the future quarters as staff return to the office/campus and resume business travel. There is, however, a time lag between returning to work and subsequent business travel. Leisure destinations are likely to enjoy an increase in occupancy and average rates, fueled primarily by transitory leisure and social events.

The total number of registrations in the third quarter of 2021 was at 32 hotels with a total of 2,624 keys, representing a 13.4% increase over the same period previous year. Conversions of historical hotels account for 15 new signings (47% of total properties inked), continuing the overall upward trend. Domestic operators outnumbered overseas operators in terms of inventory volume by a ratio of 57:43.

Goa re-emerged as the outright leader in RevPAR in Q3 2021, with a 389.8% increase over the low base of Q3 2020. Furthermore, Hyderabad experienced the biggest growth in occupancy, with a 33.6% increase in Q3 2021 over the same time previous year. Bengaluru saw a 213.2% gain in RevPAR, while Hyderabad saw a 173.5% increase compared to the same time the previous year.

In the third quarter of 2021, demand and supply of operating inventory increased by 159% and 9.5%, respectively, in six major cities as compared to the same period previous year.

"Following the second wave of the pandemic, the industry had a significant comeback in Q3 2021." Most weekends, holiday spots are sold out, as domestic travellers choose to explore other destinations across the country. As limitations on large gatherings are lifted further, the demand for weddings continues to rise. F&B eating has also seen a robust revival, both in major metropolitan centres and in tier 2 towns, as a result of improving market sentiment and increased immunisation numbers. "We have seen a little uptick in business travel in this quarter, which we feel will be a significant step towards a full recovery for the industry," said Jaideep Dang, MD, hotels and hospitality group, South Asia, JLL.