The show must go on: India hospitality industry review 2019
The hospitality industry in India has observed a promising and consistent growth over the recent years. Occupancy and ADR levels across key cities demonstrated an upward growth trend.
The year 2019 witnessed good levels of growth in hotel operating performance despite the headwinds - closure of Jet Airways, impact of general elections and softer economic growth. Business cities led the growth on back of stellar office market absorption seen across the country last year.
Furthermore, Central Government’s initiatives such as the slashing of Goods and Services Tax (GST) rates for hotels brought much optimism to the hospitality sector. Reduction of corporate tax boosted business sentiment towards the end of 2019.
Hotel industry also witnessed a 13% growth in brand signings in 2019 over the previous year. Domestic hotel chains signed a higher number of hotels while international chains signed a higher volume of rooms with larger inventory hotels. Last year also accounted for the highest volume of hotel transactions both in terms of value and number of keys traded, which displayed a strong investor sentiment and confidence.
Regretfully, 2020 could not pick up from the optimism of 2019 due to the global outbreak of the novel coronavirus (COVID-19). As of March 2020, at an all India level, has witnessed a decline of 67% in occupancy levels as compared to the same period of the previous year. As travel restrictions around the world intensify further, tourism and hospitality business in Q2 and Q3 of 2020 is likely to get severely impacted.
As we bring this report to our readers, the data is changing rapidly. The goodness of 2019 seems distant past. It is time to get back to the drawing boards and restart the journey. 2020 will be a year of caution, a year full of new learnings and a year of change.
We believe that our industry will navigate through this turbulent time and emerge stronger.
The show must go on…