The Hindu Business Line

Hotel rooms: Independen­t/unbranded segment still dominates with 72% share

New age chains have 8% share; number of hotel rooms estimated at 2.72 m


Assessing the size of the India’s hospitalit­y sector for the number of rooms has rarely been attempted, given the complexity of the exercise.

But a hospitalit­y consulting firm Hotelivate has conducted a survey to put the figure at 2.72 million hotel rooms as of December 2018, across the country.

It estimates the number to grow to 3.33 million rooms by 2023.

These rooms operate across branded/traditiona­l hotel chains like Indian Hotels Company Ltd, Marriott Internatio­nal, ITC Hotels; new-age hotel chains like OYO Rooms, Treebo, Fab Hotels; independen­t or unbranded hotels and alternativ­e accommodat­ion that include guest houses and residentia­l properties.

According to a report titled The Ultimate Indian Travel & Hospitalit­y Report, released by Hotelivate in associatio­n with the WTTC II and CAPA India, the independen­t/unbranded segment constitute­s 72 per cent of the hotel rooms in India.

The growing popularity of homestays, along with guest houses, makes alternativ­e accommodat­ion the second largest room unit category in The Hotelivate report estimates the number of hotel rooms to grow to 3.33 million by 2023.

the country at 15 per cent. Traditiona­l hotel chains that dominated the organised sector in the past, now constitute only 5 per cent of the total rooms in India, while new age hotel chains, with their highly scalable models, constitute 8 per cent.

“The Hotelivate team decided to conduct a detailed market sizing exercise in consultati­on with key industry stakeholde­rs. While we are not claiming to be 100 per cent accurate, our approach is methodical and uses reliable data points and assumption­s,” said Manav Thadani, founder and chairman of Hotelivate and co-author of the report.

Room-to-employee ratio

The report estimates that the hospitalit­y industry employs 2.4 million people directly, as of December 2018, resulting in a weighted average of 0.89 employee-per-room on a nationwide basis and expects

the number to rise to 3 million by 2023. Despite a low room-to-employee ratio, independen­t/unbranded hotels are the largest employers.

Branded/traditiona­l hotel chains come second, with the highest room-to-employee ratio, followed by the new-age hotel chains.

Hotelivate tracked close to 500 hospitalit­y markets in India to establish the “known” supply for these rooms.

Between July 2017 and March 2018, ₹6,709 crore was payable in GST revenue by the Indian hospitalit­y industry, as per Hotelivate estimates, most of which came from the sale of rooms (73 per cent), with the balance being contribute­d by F&B and other department­s of the hotels.

Hotelivate estimates the total GST payable by the industry to touch ₹23,982 crore annually in 2023-24.

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