Indian hotel rates may rise by 7-10 per cent year-on-year (Y-o-Y) in 2024, according to a report by The Economic Times (ET), due to robust economic growth and sustained demand. Despite uncertainties related to events like the general election, industry executives believe that factors such as new supply absorption and strong demand in key business and leisure markets will contribute to the increase.
In business hubs like New Delhi and Mumbai, where supply additions are limited, rates may go up by 10-15 per cent. Leisure destinations such as Kashmir, which is also facing booming demand with limited supply, could witness an uptick of over 15 per cent.
The 7-10 per cent increase in same-storeroom rates across India was driven by a higher demand for popular destinations and events at venues like Bharat Mandapam and the Jio World Convention Centre.
The report outlines that there has been an undeniable rise in demand in the Indian hospitality market. Aside from the rate increases, 2024 may even see an increase of around 25,000 rooms, with emerging markets like Ayodhya, Varanasi, and Deogarh contributing to the demand. Experts added that the listed hotels' market cap, at Rs 1.2 crore, is expected to reach 1.5 trillion by the end of the 2024 calendar year.
On New Year's Eve, hotels around the country reported a surge in dining out and bookings in resort destinations across all major metropolitan cities in India, as reported earlier by Business Standard. The festivities, along with weddings, have contributed to domestic travel, with hotels registering robust year-end occupancies. Hotel tariffs also skyrocketed during this time due to high demand, especially in heritage sites.
Growth in office leasing in key markets is also contributing to robust occupancies and upward stability in room rates. Overall, industry executives remain optimistic about the upward trajectory of hotel rates in 2024, following the ongoing trends.
