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Government-led reforms to boost hotels sector growth

December 2019
According to Hotel Momentum India (HMI) – Q3 2019, a hospitality monitor for the period July to September 2019 released by JLL Hotels & Hospitality Group, nine out of the top 11 markets witnessed a rise in RevPAR performance during the stated duration. An improving economic environment, growth in the number of offices, expansion of businesses and industry-friendly reforms, including GST reduction to 18 per cent for premium and luxury hotels, have all contributed to this growth across most top Indian markets.

According to HMI, while Mumbai ranked on top in absolute terms, Bengaluru led in RevPAR percentage change in both during the third quarter and YTD September 2019 over the same period last year. During the quarter, Bengaluru followed by Hyderabad and Gurugram witnessed the maximum change in ADR. Ahmedabad and Goa have been the only exception to the trend.

“The first nine months of the year (January-September 2019) have been exciting for the entire industry,” says Jaideep Dang, Managing Director, Hotels and Hospitality Group, India, JLL.“While there have been some positive developments on the reforms front, the country’s strong and stable services sector continues to fuel the commercial real-estate market. This has a direct bearing on the hotels sector, which is highly dependent on the performance of the services industry across India’s top cities.”

HMIreports that branded hotel signings in the third quarter (July-September) of 2019 remained consistentcompared to the corresponding period in 2018, indicating stability in the market. During the same period, the country witnessed a total of 36 hotel signings, comprising 2,867 keys compared to 35 hotels comprising 3,422 keys. Upscale and midscale hotel brands that have contributed the maximum to signings during this period.

“The year 2019 is expected to end on a good note, both for real-estate markets and the hotels sector,” adds Dang. “Consistency in hotel signings suggests there is strong demand in the market.”

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