Hotels in Mumbai are now exhibiting signs of resurrection after months of low business due to severe COVID-related regulations. According to a survey by real estate services firm HVS Anarock, Mumbai had the greatest occupancy (51-53%) month over month in June, followed by New Delhi (39-41%).
The resurgence is largely driven by staycations and weekend business, with corporate travel still slow to take up. This might also be linked to an increase in domestic air traffic of almost 47% in June compared to May when travel restrictions in India began to relax across states as the country's COVID cases declined.
“Hotel occupancy in all major cities increased month over month in June 2021, owing to a resurgence in leisure travel as restrictions across Indian states began to ease,” said Mandeep S. Lamba, President (South Asia), HVS Anarock.
In June, occupancy demand in places like Chennai, Hyderabad, Pune, Chandigarh, Kolkata, and Bengaluru increased substantially year over year. Due to the continuing COVID-19-related curfew in the state, more leisure-oriented locations, such as Goa, saw a drop in demand. Kochi, which is scattered across a series of islands and crisscrossed by the sea and backwaters, witnessed a similar slump in demand.
The health of the hotel industry is rebounding after a huge setback caused by the disastrous second wave of the COVID-19 pandemic. On a month-to-month basis, hotel occupancy grew by 12-14 percentage points, average daily rate (ADR) increased by 14-16%, and RevPAR (revenue per available room) increased by 95% in June.
According to the study, hotel stocks are on the rise as of 20 July, owing to growing optimism in the industry, with Indian Hotels Company Ltd (IHCL), which owns the Taj Group of Hotels, outperforming the market in recent months.
In comparison to the previous year, new openings and signings by properties increased slightly in the first half of the year (H1 2021). In the first half of 2021, 19 hotel brands opened, compared to 14 the previous year.
“Unlike the previous lockdown, hoteliers did not take a wait-and-see approach, but instead persisted with their expansion plans, signing smaller properties with a greater emphasis on tier-III and tier-IV cities and towns," Lamba said.