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The hospitality sector expects a surge in occupancy

The hospitality sector expects a surge in occupancy

October 17, 2022

According to hospitality industry insiders, rates and occupancy in September exceeded those for August, indicating that both metrics will continue to rise throughout the holiday season.

Industry tracker STR reported to media organizations that September was a marginally better month than August, with occupancies and rates improving by 3% and Rs 200, respectively.

It is business as usual for most people and business travel has started to boom. Apart from the Diwali period, business hotels are seeing an upward trend. Most people like to celebrate Diwali with friends and family at their homes. Therefore, travel trends for this holiday period are unlike any.

Business seems to be layering up quite well for leisure locations. Based on forward-looking data for 15 domestic sub-markets, STR has sufficient visibility into occupancy and future rates for this assessment.

In comparison with August, more than 70% of major markets in India have grown in revenue per available room (RevPAR) but that is mostly seasonality and the nature of business-led organic growth.

For some leisure locations, business visibility extends three months into the future.

In some of the leisure destinations, the booking is going as early as 90 days out. Add to it, there is business on books and spikes in occupancies visible whereas about 25-30% of business is picked up in a couple of weeks of the lead-up to some business destinations.

STR reports that leisure locations of Himachal and Uttarakhand have recovered the most (almost double their pre-pandemic September 2019 RevPAR levels) largely due to an increase in average daily rates.

After a seasonal dip in August, the Indian hotel industry bounced back in September with an estimated 64-65% occupancy rate, 4-5 percentage points higher than in August and comparable to September 2019. The demand is being driven by corporate travel, relocation business, and small meetings, as well as staycations and visiting friends and relatives, which has increased in recent months. The strong recovery in demand is driving consistent increases in average room rates, with nationwide average rates reaching around Rs 6,000 in September.

In August, most business cities saw a slight dip in occupancy and RevPAR compared to July amid long weekends. However, corporate travel remains strong as evidenced by the growth in average daily rate levels across all business cities in August over the previous month. During the last quarter of the year, we expect a marginal dip in corporate travel and a rise in leisure travel given festivities in October and year-end celebrations.

Goa which is a popular work and leisure destination has also witnessed a spike in demand. Most properties are booked days in advance and the average rates have also gone up. Most tourists love coming to Goa during the monsoon months and during those periods business has been brisk. Year-end bookings are filling fast. While there are great properties in and around Goa but having a holiday home in the area is the best way to enjoy the state all year round.

If you have a holiday home, it is easy to get to Goa for almost every long weekend. August had plenty of long weekends that people could take advantage of.

Another advantage of a Holiday home is that it allows homeowners private time and they never have to worry about getting a place even in the peak tourist months. Axis Ecorp has become synonymous with holiday homes. The company has a host of options for users to choose from. From Axis Blues to Axis Yog Villas to now Axis Lake City, homeowners have the option to choose from any of these and enjoy great appreciation and rental income.

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At Axis Ecorp, we firmly believe that there is no shortcut to success. The Group’s endeavours reflect the value we place in building long-term relationships, offering personalised and transparent services, and staying ahead of the competition.

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