Revenue per available room of hotels in India FY 2004-2023
Revenue per available room (RevPAR) is a key indicator in the hotel industry, calculating revenue in terms of how successfully rooms are being filled. In fiscal year 2023, for every room that was filled in a hotel in India, the revenue was 56 U.S. dollars. This was an increase compared to the previous year. Unsurprisingly, the years of the COVID-19 pandemic saw a dip in RevPAR.
Regional tourism impacting hotels
The general push towards domestic tourism within India post-COVID, along with increasing disposable incomes and a rising middle-class has contributed to the recovery of the hotel industry in the country. RevPAR was highest among tier-1 cities including Hyderabad, Delhi, Mumbai, and Bengaluru. Business and corporate travel is a key contributor to growth in these cities, specifically among luxury hotels. Regions that are mainly holiday destinations (like Goa, Kerala, Udaipur) experience a more seasonal fluctuation – with higher occupancy rates during summer months and holidays. Furthermore, tier-II cities, and mid-range and budget hotels have recorded significant growth in recent years.
Mid-range hotels disrupt traditional hotel market
The impact of inflation on operating costs, rise of online travel agencies, and competitive pricing reflect in the fluctuations within the hotel market. This is especially prominent in the mid-range segments with players like Airbnb and OYO Rooms disrupting traditional hotel segments, forcing the country’s leading hotels to reassess, innovate, and adopt more dynamic methods to attract customers.