Accommodation barometer on the rise

The Indian hospitality sector is on a remarkable trajectory, witnessing interesting developments due to ever-evolving market dynamics, sectoral challenges, government policies and shifting traveller sentiments. As hospitality brands such as Marriott, IHG, Hilton and IHCL gear up for the coming year with plans for rapid expansion across the nation, the insights from the India Accommodation Barometer 2024 report by Booking.com in partnership with Statista has reaffirmed the industry’s drive for growth and expansion. The report reveals a surge in optimism among hoteliers, alongside a rising appetite for investment and a growing integration of digital technologies.

Indian hoteliers are optimistic about the future, with 75 per cent of survey respondents expecting the economic situation to improve in the next six months and 69 per cent anticipating positive growth for their business. Hoteliers are finding it easier to access resources, with half of the respondents reporting no difficulties in securing funds. This data is further backed by hospitality brands such as IHCL announcing expansion plans for the near future under the ‘Accelerate 2030’ strategy which focuses on doubling consolidated revenue, achieving a 20 per cent return on capital employed and expanding its portfolio to over 700 hotels globally by 2030.

Puneet Chhatwal, Managing Director and Chief Executive Officer, IHCL, regarding the brand’s expansion strategy and vision, says, “IHCL has surpassed its guidance by achieving a portfolio of 350 hotels, with over 200 hotels in operation and delivered 10 consecutive quarters of record financial performance. This strong performance, coupled with a robust balance sheet, positions us well to accelerate our growth momentum. Enabling this vision are long-term structural tailwinds for the sector including India’s forecasted GDP growth of over 6.5 per cent, government’s continued focus on infrastructure spending, hotel demand outpacing supply and the rising affluence of the consumer base.”

Indigenous hospitality brands along with international competition are also eyeing rapid expansion in the upcoming year with plans to grow in key markets as well as Tier II and Tier III cities while international players have quickly started expanding their portfolio in the nation.

As the hospitality landscape evolves, Indian hoteliers perceive some risks that require resilience and adaptability to ensure long-term success. Challenges like potential tax increases (70 per cent), competition from other accommodation providers (63 per cent), energy costs (62 per cent), government regulations and bureaucracy (58 per cent) and staffing costs (57 per cent) are some of their key concerns. Despite these anxieties, Indian hoteliers continue to see opportunities to expand and grow their businesses within the next six months, primarily through optimising their digital footprints and elevating their service offerings.

Over 77 per cent of Indian hoteliers see value in listing their offerings with online travel platforms, presenting an opportunity to increase visibility to a global audience. In a world where digital content creation matters more than ever, 75 per cent of hoteliers recognise social media marketing as a powerful tool for growth 72 per cent see the potential in optimising a hotel’s website while 66 per cent feel new technology will enhance guest experience and improve operational efficiency. Customer loyalty is paramount for success in the hospitality sector, incentivising and encouraging repeat visits would help foster customer loyalty, creating brand advocates.

As the Indian hospitality sector undergoes transformation, online travel platforms are generating significant value for the accommodation partners that choose to list on them. A strong positive sentiment expressed by the hoteliers signals a shift towards a more tech-savvy world where the traveller is at the centre of all the offerings. Nearly half (49 per cent) Indian hoteliers are using one travel platform, 37 per cent using two or more and only 14 per cent of Indian accommodations are not using any.

Online travel platforms are among the key pillars of a vibrant travel ecosystem and are valued for a range of reasons which includes gaining more bookings in general amounting to over 79 per cent with 78 per cent filling last-minute inventory to reduce unsold rooms and 73 per cent attracting international visitors. Online Travel Platforms have also simplified the booking process and achieving higher room rates, contributing nearly 72 per cent.

Santosh Kumar, Country Manager for India, Sri Lanka, Maldives and Indonesia at Booking.com stated, “The 2024 Accommodation Barometer underscores the immense potential of India's hospitality sector. We're witnessing a surge in optimism among hoteliers, driven by factors like increased domestic and international travel, evolving consumer preferences, and the increasing adoption of technology. Booking.com recognises the pivotal role accommodations play in the tourism landscape and remains committed to empowering our partners to capitalise on this momentum and deliver exceptional guest experience.”