Hospitality sector grows for third year
The hospitality sector for the third year in a row has registered a major growth in most markets across all categories.
By Raja Awasthi, TNN |
NEW DELHI: The hospitality sector for the third year in a row has registered a major growth in most markets across all categories.
The highest annual growth in average rate, in rupee terms, was witnessed in the five-star segment at 28.8% and five-star deluxe 26.6% followed by the four-star category 23% compared to last year.
The average rate for three-star properties showed a lower increase of 11.7%. It is interesting to note that in last one decade the compounded average rate growth in rupee terms has been the strongest in the four-star category followed by five-star and five-star deluxe hotels.
According to HVS International, which is a leading consultancy market research, hotels across all categories have witnessed an improved foreign-domestic guest ratio. Despite a stronger rupee, the growth in average rate in US dollar terms has been higher across all categories.
HVS International MD Manav Thadani says: “For the third year in a row the hospitality market has witnessed an increase both in terms of occupancy and average rate. The occupancy growth were a lot more than in the past few years and the five-star category actually saw occupancies decline marginally. Average rates, on the other hand, saw exceptionally strong increases over the previous year.”
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The all-India occupancy touched the 70.8% mark for the first time. Many cities were completely sold out on a number of weekday nights, resulting in hotels taking their rates up sharply. The largest increases were seen in the luxury segment followed by the mid-market and budget segments. HVS International which has been doing this report for last one decade, the demand-supply imbalance in certain cities like Delhi, Hyderabad, Mumbai and Jaipur enabled hotels in these cities to charge higher tariffs across all market segments.
In last 12-month growth of 23.7% in average rate in 2005 -06, as opposed to a growth of 20.7% the previous year. Occupancy growth, which had been a robust 7.1% the previous year, showed a marginal growth of 2.6% in 06.
In terms of RevPAR (rooms revenue per available room) all star categories experienced healthy growth this year. Five-star deluxe hotels experienced the maximum growth in rupee terms 32.1% followed by five-star hotels 27.3% and four-star hotels 23.9%.
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The three-star segment witnessed the least improvement 21.0%. In US dollar terms the five-star deluxe segment showed the highest increase of 33.3%, followed by the five-star of 28.5% and four-star 25% segments.Start a SIP with as low as ₹500 with ET Money App!
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