2024 India Accommodation Barometer: Key Trends and Insights
Indian travel accommodation and hotel sector sees record-high optimism in 2024, with business confidence surging
2024 has been a standout year for Indian hoteliers, with positive sentiments expressed by survey respondents across all major economic metrics. Twothirds of Indian accommodations reported good or very good business performance over the past six months, reflecting a substantial improvement from 2023 when the Barometer survey was first conducted. In comparison, only half of accommodations expressed similar optimism last year.
This optimism appears to stem from the positive trends in room and occupancy rates, which have followed a similar upward trajectory. Business confidence also aligns with the increasing ease of obtaining funds, with half of the respondents now reporting no difficulties. In contrast, only 14% of Indian hoteliers found access to capital to be (very) difficult, a significant drop from 33% previously. Optimism on all fronts likely boosted investment appetite, with 52% of respondents intending to increase investments over the next six months, compared to just 12% who said the opposite.
Perhaps the most striking display of Indian hoteliers’ optimism is reflected in their outlook for the future. Currently, seven out of ten feel (very) positive about their business prospects — a 24-percentage-point jump from the previous year, marking the largest increase across all economic indicators. This surge in sentiment confidence bodes well for Indian hospitality and signals that the industry’s rebound momentum shows no signs of slowing down.
Size matters, so does star classification.
When examining different subgroups, optimism is evident across all accommodation categories, but larger establishments show consistently higher business sentiment. Accommodations with 250+ beds reported stronger results than smaller ones, with gaps ranging from seven to 27 percentage points. For example, 78% of larger accommodations reported increased room rates in the last six months, compared to 62% of smaller properties. Similarly, hotels, typically larger than their short-term rental counterparts, experienced better business development. Though the differences were less pronounced.
Star classification also plays a role. Four- and five-star hotels exhibited notably positive sentiment and outperformed their midscale and bootique counterparts. For instance, 83% of four- and five-star hotels reported (very) good business development over the past six months, compared to just 1% that experienced negative outcomes. In contrast, 61% of three-star hotels reported (very) good development, while 17% reported (very) negative results. Additionally, mid-range hotels lagged behind budget competitors (one- and two-star hotels) in this year’s survey, despite reporting slightly more positive outcomes in 2023.
Tax increase is a main risk, while utilising digital tools holds the most promise for the future growth.
While business sentiment in the Indian hospitality sector remains positive, hoteliers must carefully manage both existing and potential challenges in an increasingly complex environment. Economic concerns such as potential tax increases (70%), energy costs (62%) and staff expenses (57%) are at the forefront. Additionally, competition from other accommodation providers (63%) and regulatory challenges (58%) constituted the top five perceived risks to sustained growth. Interestingly, even with rising instances of heat waves and droughts, more hoteliers (38%) do not foresee climate change affecting their business in the next three years, compared to those who do (33%).
Looking ahead, Indian hoteliers are eager to capitalise on opportunities, particularly in digitalisation. Listing on online travel platforms (77%) is widely considered the top opportunity for the next six months, followed closely by enhancing social media marketing (75%) and optimising hotel websites (72%). Hoteliers are also focused on improving service quality, with 60% identifying investments in comfort and 59% highlighting personalised guest experiences as key strategies to attract more visitors and elevate their business
Online travel platforms are widely used and appreciated.
Six out of every seven hoteliers in India list on digital platforms and, of those, many choose to use two or more. This comes as no surprise given that roughly eight out of ten platform users report increased bookings as a motivation for using these services.
Additionally, 78% of hoteliers see the value in filling last-minute inventory to reduce unsold rooms, while 73% use platforms to attract international visitors. Other benefits ranked highly by Indian hotels are mitigating the impacts of seasonality, simplifying the booking process for consumers, and reducing overall distribution costs.
Government policies rose in importance.
In the 2024 survey, 70% of Indian hoteliers rated government policies as (very) important, a sharp rise from 44% the previous year, indicating a growing significance of the regulatory environment in which they operate. Policies are also anticipated to be slightly more beneficial on net for business success in the coming six months, a reversal from last year’s outlook. Larger hotels (250+ beds) report more positive effects from regulations (36%) than smaller ones (32%) and expect fewer negative impacts (19% vs. 30%). Key areas for government support include reducing taxes, improving public transport, and enhancing access to financing.
This second edition of the India Accommodation Barometer is based on a survey of 250 executives and managers in the Indian accommodation sector. It is jointly produced by Booking.com and Statista.
This article is a reprint of the Executive Summary from the 2024 India Accommodation Barometer
