Room sup­ply by 4% in ’19

The sup­ply of rooms is an­tic­i­pated to grow by 4 per cent and de­mand by 7 per cent in 2019, ac­cord­ing to a re­cent ‘In­dia Hos­pi­tal­ity In­dus­try Re­view 2018’ re­port by HVS ANAROCK.

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Over the last two years, ho­tel sup­ply grew by 3.7 per cent in 2017 and 3.5 per cent in 2018, whilst de­mand grew by 7 per cent and 6.8 per cent in the re­spec­tive years. While

both the past years have paved way for strong growth in de­mand for 2019 driven by strong eco­nomic growth in the coun­try, some head­winds in 2019 are ex­pected to dampen the per­for­mance turnout for the year. coun­try’s gen­eral elec­tion, dur­ing which the com­mer­cial mar­ket, the main stay for ho­tels in the coun­try, puts on hold all de­ci­sion mak­ing in an­tic­i­pa­tion of the elec­tion re­sults that could po­ten­tially have a ma­te­rial im­pact on sev­eral pol­icy ini­tia­tives of the gov­ern­ment. Thank­fully though, elec­tions will be held in the sum­mer months when de­mand in the coun­try is com­par­a­tively low, lim­it­ing its neg­a­tive im­pact on ho­tel per­for­mances. The sec­ond ma­jor rea­son is the im­pact of new ho­tel sup­ply that is ex­pected to com­mence op­er­a­tions in the cur­rent year. As per our es­ti­mates, 8,574 keys will en­ter the mar­ket in 2019, a nearly 19 per cent rise over the last two years. With a stel­lar per­for­mance in In­dia recorded a stag­ger­ing growth of nearly 11 per cent in RevPAR, backed by strong growth in both oc­cu­pancy and ADR in al­most all key de­mand

seg­ments in the coun­try, the re­port states. While 2019 per­for­mance may be damp­ened by the elec­tion, HVS ANAROCK pre­dicts the tide to change in 2020 as mar­ket sen­ti­ments re­cover on the as­sump­tion that the coun­try will en­ter the year with a stable gov­ern­ment and strong eco­nomic growth. Should the above two pa­ram­e­ters squarely line up com­bined with lit­tle new sup­ply ex­pected to open in 2020, ex­perts an­tic­i­pate the ho­tel in­dus­try to record its high­est oc­cu­pancy ever since the be­gin­ning of the cen­tury, out­pac­ing 2006, which was recorded as a su­perla­tive year for the in­dus­try in this met­ric.

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