The sector, however, witnessed a rapid and strong recovery post the third wave in January 2022, driven by growth in demand for leisure, wedding, and business travel. As a result, RevPAR--a metric used to calculate the revenue of a hotel room--witnessed a growth of 39.1% year-on-year (YoY) in Q1, 2022 (January-March).
There was a strong recovery in both leisure and business travel post the third wave of the pandemic. Mumbai emerged as the RevPAR growth leader in Q1 2022 registering a growth of 71.5% over Q1 2021 following the Omicron wave. This was primarily led by the Indian Premier League (IPL), conferences, and corporate travel into the city.
While the beginning of Q1 2022 was slow, in February and March, rapid revival was witnessed in the domestic leisure as well as Meetings, Incentives, Conferences and Exhibitions (MICE) and business travel demand segments. Many hotels in major metropolitan cities witnessed significant growth in domestic business travel. Furthermore, the sector witnessed signs of revival of international business travel as senior management personnel started visiting their offices in India after more than two years.
The next two quarters are expected to remain buoyant on the back of domestic leisure amidst the summer holidays. Continued growth in business travel is expected as most people have resumed work from the office and are traveling for client meetings as well as project work, said the company.
“We are witnessing a significant up-tick in domestic corporate travel as office occupancies have gone up and people have re-started traveling for client meetings and off-sites. Additionally, the steady growth of international corporate travel has boosted confidence in the travel trade. Uncertainty may remain around covid variants and waves, but we feel that the sector is set to recover well in 2022," said Jaideep Dang, Managing Director, Hotels and Hospitality Group, South Asia, JLL.
The domestic segment will continue to drive demand for both corporate and leisure travel while international travel is expected to witness steady and cautious growth over the next couple of quarters. The easing of restrictions on social gatherings and the delays caused by the third wave of the pandemic has resulted in a surge in demand for weddings and social events. MICE demand is expected to witness steady growth over the next few quarters as hotels have already begun hosting sizeable conferences which were postponed previously.
The total number of hotel signings in Q1 2022 stood at 56 hotels with 3,739 rooms or keys. The hotel signings witnessed a significant increase of 81.2% as compared to signings in Q1 2021 when the Omicron wave had hit India. Domestic operators dominated signings over international operators with a ratio of 75:25 in terms of inventory volume.
