How Indians Travelled in The First Half of 2019 And The Impact on Hotel Occupancy

Hotels across India may have attracted less travellers this year, but the travel sector is not going down any soon.

According to the half-yearly report released by Hotel Momentum India (HMI) of  JLL Hotels and Hospitality Group, Indians have travelled far less from January to June this year. As a result, the hotel occupancy declined to a great extent in cities like Goa, Pune, Ahmedabad. However, some cities like Mumbai and Hyderabad have recorded decent footfalls.

A couple of factors contributed to a slack in travel; from the long elections spanning April to June, to the grounding of Jet Airways and an extremely harsh summer, travellers either opted out of travel altogether or went overseas to spend their holidays.

Now that collectively contributed to a reduction in occupancies across hotels in key Indian cities. However, thanks to upwardly stable Average Daily Rates (ADR), the hotels still maintained a stable momentum during these first six months.

The cities that witnessed a marginal rise are Mumbai, followed by Bengaluru, Gurugram and Hyderabad. The first three months of the year (January to March) happened to perform well because of the winter season, which is conducive for leisure travel in India. Even in terms of business travel, the game was quite strong. Though subsequently, last-minute flight cancellations or expensive re-ticketing impacted the performance of cities like Goa and Jaipur, and business markets for Pune and Ahmedabad.

Despite these challenges, top cities have performed decently and will continue to attract travellers if the room rates continue to remain stable in the future. Some cities, however, that are high on the tourism and business radar are likely to see an upward movement in room rents, capitalising on the demand.

While last year saw maximum footfalls in budget hotels, this year has been all about upscale and midscale hotel brands. In any case, the performance and growth of the travel sector isn’t going to get hindered because along with just staying at hotels, new age businessmen and entrepreneurs are also investing in hotels (as opposed to real estate) given its long term potential.