RevPAR increased by 60.9% YoY in 3QFY22. Subsequently, RevPAR increased by 30.1%. This is due to an increase in business travel between October and December 2022.
The hospitality industry continued to show strong year-over-year (YoY) business growth in the October-December quarter, driven by business travel, weddings, vacations winter, and celebrations. End calendar year 2022 with revenue per available room (RevPAR) up 90% year over year. RevPAR is used as a metric to measure hotel performance.
Business is also strong in October-December 2021, supported by weddings and domestic leisure travel, but business travel is only a fraction of what it was in the previous quarter.
As a result, RevPAR increased by 60.9% year-over-year in 3Q22. Subsequently, RevPAR increased by 30.1%. According to JLL’s latest Hotel Momentum India (HMI) this quarter, this is due to an increase in business travel between October and December 2022.
Demand for hotel rooms in business and leisure destinations is remained strong in the quarter, driven primarily by meetings, incentives, meetings and exhibitions (MICE), weddings and other business travel. Despite the holiday season, occupancy rates in most commercial cities have been good – 65% – and growth in average daily occupancy (ADR) has been strong. This momentum is expected to continue in the last quarter of FY23, driven by a recovery in weddings and business travel.
“Given the looming global head winds, inbound travel may witness a slowdown. However, domestic economic fundamentals remain strong and are expected to keep the domestic business environment stable. Additionally, a significant increase in hotel investment and related activities was witnessed towards the later part of last year. This momentum is expected to continue in 2023,” said Jaideep Dang, the company’s managing director for the hotels and hospitality group, India.
A total of 81 hotels were signed in the third quarter, totaling 6,663 rooms. Additionally, 25 of the contracted hotels were converted from other hotels. Conversions accounted for 27% of signed inventory during the quarter.
The company added that India’s six major markets saw strong year-over-year RevPAR growth in the third quarter due to a lower business travel base than a year ago. Bengaluru led the market with a growth of 110.6% in the third quarter, followed by Mumbai and Delhi with an annual growth of 105.3% and 94.3% respectively.