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.

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.