Hospitality sector registers 4.8 per cent RevPAR growth in Q2 FY24

JLL has recently released JLL’s Hotel Momentum India report for the second quarter of the current fiscal. According to the report, the hospitality sector continued to witness Year-on-Year growth in performance during the second quarter from April to June, 2024, primarily driven by a rise in Average Daily Rate (ADR), resulting in a RevPAR growth of 4.8 per cent.

However, the second quarter recorded a dip in occupancy levels which can be attributed to the onset of summer vacations and a subsequent decrease of corporate travel. Due to this, the sector also noted a dip in RevPAR growth of 15.9 per cent on a quarterly basis when compared to the first quarter of the ongoing year. This can be attributed to the second quarter of the year typically being the lean season for the sector with reduced corporate travel.

Apart from a slight decrease in Goa's ADR, all other markets have showcased considerable growth in ADR and revenue per available room figures, with Hyderabad leading the list. Although occupancy levels remained relatively stable in the quarter compared to last year, ADR levels have improved, leading to an increase in RevPAR across all markets, excluding Goa. The upcoming quarter is anticipated to benefit from the resurgence of corporate travel, festivals, and other corporate and social Meetings, Incentives, Conferences, and Exhibitions (MICE).

In Q2 FY24, there were 82 branded hotel signings comprising 9,732 rooms and 15 hotels signed were conversions of other hotels, accounting for 11 per cent of the inventory signed during the quarter.

Branded hotel openings comprised 50 hotels with 3,755 keys, of which 90 per cent of the total number of keys were located in tier 2 and 3 cities, including Tirupati, Udaipur, Thane, and Mysore, etc.

Additionally, Hyderabad emerged as the leader in RevPAR growth during the quarter registering a growth of 11.9 per cent compared to last year, followed by Delhi and Bengaluru with an annual growth of 11.8 per cent and 10.4 per cent respectively.

Jaideep Dang, Managing Director, Hotels and Hospitality Group, India, JLL, stated, “Backed by strong performance of hotels across India, we continue to see investors moving money in this asset class. There is strong momentum on both greenfield developments as well as operating assets across business and leisure markets.

Although the summer season has brought down corporate room night demand in Q2 2024, the sector continued to demonstrate growth in average daily rates (ADR) compared to Q2 2023. Looking ahead, the sector's performance in the upcoming quarters appears promising due to the upcoming festival season, general rise in domestic corporate travel, the return of MICE events, weddings, and other social gatherings.”