Govt's infra push behind surge in new upscale, premium rooms in Indian hospitality sector

New Delhi: In a boost for the Indian hospitality industry, 2,706 new rooms were added in the upscale and premium segment in the first half of this year, a report showed on Monday, amid a notable growth in infrastructure development.

Out of these, 994 rooms (37 per cent) were upscale while the remaining (63 per cent) consisted of premium inventories.

A total of 22 new projects opened in H1 2024.

Major hospitality brands such as IHCL, Radisson, Hyatt, ROHL, Bharat Hospitality and Wyndham opened new projects, according to Skye Hospitality, a strategy consulting company.

Thirty-four per cent of the new supplies were located in the West, followed by the East (28 per cent). North and South contributed to 26 and 12 per cent, respectively. Major hotel brands are now launching new products in territories such as the northeast, J&K, Andaman, Lakshadweep, etc.

"Indian hospitality industry is on a strong footing marked by a rise in occupancy, new projects opening and a bullish pipeline for the future," said Ankit Kansal, MD, SKYE Hospitality.

In the first half, average occupancy in major hotels ranged between 70-75 per cent. Occupancy has risen by around 15-20 per cent compared to the same period in the previous year. According to the report, the Indian hotel industry is witnessing a robust rebound backed by a rise in business events, leisure travel, wedding season, etc.

Other factors such as the growing trend of staycations, surge in experiential travel trends among millennials and Gen-Z, and rise in wellness tourism packages are also fuelling demand for the hospitality business in India.

"The concept of revenge travel is also there, as most of the hotels operate at 100 per cent occupancy during extended weekends," Kansal added.

The government is also playing a pivotal role through concentrated policy efforts to boost the infrastructure and introduce numerous attractive schemes. Infrastructure development in the form of highways, railway corridors, and airports has enhanced overall accessibility. The next three to five years will see aggressive expansion in the industry, as both domestic and international brands will extend their footprint across segments, he said.