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Hospitality Sector Shines: RevPAR Grows by 10.8% YoY in Q3 2024

Hyderabad Leads with Impressive 23.6% Growth; Tier-II and III Cities Make Their Mark

The Indian hospitality sector continues to thrive, recording a 10.8% Year-on-Year (YoY) growth in Revenue Per Available Room (RevPAR) in Q3 2024, according to JLL’s Hotel Momentum India (HMI) report. This remarkable performance is fueled by rising Average Daily Rates (ADR) and sustained domestic demand, positioning the industry for an optimistic Q4.

Q3 Highlights: Growth Amid Resilience

Hyderabad Takes the Lead
Hyderabad emerged as the top-performing market, achieving a staggering 23.6% RevPAR growth compared to Q3 2023. Chennai and Mumbai followed closely, with YoY growth rates of 17.7% and 16.8%, respectively. Most major markets, including Bengaluru, Delhi, and Chennai, saw a rise in ADR, with only Delhi and Goa experiencing slight dips.

Stable Occupancy, Rising Revenues
While occupancy rates remained steady, the sector’s growth was driven by improved ADR levels, leading to positive RevPAR figures across key markets. Quarter-on-Quarter (QoQ), RevPAR grew by 2% in Q3 2024, indicating consistent momentum despite seasonal challenges.

New Openings and Conversions: Tier-II and III Cities Take Center Stage

Branded Expansions
In Q3 2024, 96 branded hotel signings were recorded, accounting for 10,686 rooms. Notably, 12 of these were conversions, representing 11% of the newly signed inventory.

Focus on Smaller Cities
Out of the 30 new hotels launched in Q3 2024, 80% were in Tier-II and Tier-III cities, including Udaipur, Ranchi, Mussoorie, and Tirupati. This trend highlights the industry’s focus on expanding beyond metros to cater to emerging demand in smaller markets.

Corporate Travel and MICE Drive Momentum

The third quarter of 2024 benefited from increased corporate travel, a characteristic feature of this period. With the upcoming festival season, Meetings, Incentives, Conferences, and Exhibitions (MICE) events, and social gatherings such as weddings, the industry is poised for further growth in Q4.

Expert Insights

Jaideep Dang, Managing Director, Hotels and Hospitality Group, India, JLL, noted:
“There is strong momentum in greenfield developments and operating assets across business and leisure markets. The rise in ADR despite the summer slowdown in corporate room nights is a testament to the sector’s resilience. The upcoming quarter looks promising, driven by festivals, domestic corporate travel, and social events.”

Looking Ahead

The hospitality sector’s robust performance underscores its resilience and adaptability. With a continued focus on domestic travel and expansion into smaller cities, Q4 is expected to further consolidate this growth.

Source: STR, JLL

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