Indian Hospitality Industry Market Insights

Indian Hospitality Industry Trends and Insights

1. INDIAN HOSPITALITY INDUSTRY

2. Market Trends & Statistics

3. 3
Indian Hotel Industry Projected Growth Rate (2024 – 2029)
❖The Indian hospitality industry is projected to grow from approximately US$ 24.61 bn in 2024 to US$
31.01 bn by 2029, at a CAGR of 4.73%
Rising Demand & Record Performance in Hospitality Sector
❖As of June 2024, India boasts 2.48 million operational lodging rooms, with room supply growing by ~8%
and demand soaring by 42% in FY'23 compared to the previous year
❖This surge in demand has driven the highest average daily rate (ADR) and revenue per available room
(RevPAR) levels in the past decade, contributing to occupancy rates that are the second highest since
2019-20
Travel Industry Recovery Post-Pandemic
❖The travel industry saw major declines in 2020-21, with RevPAR, occupancy rates, and ADR dropping,
along with a 74.9% decline in foreign tourists and a 74% drop in domestic tourists
❖In 2022, the industry rebounded, with ADR and RevPAR exceeding pre-pandemic levels, and foreign
tourist visitation rising by 307% and domestic visitation by 155%
Indian Tourism Industry Projected Growth Rate (2024-2029)
❖India's Travel & Tourism market is projected to generate US$22.30 bn in revenue in 2024, with CAGR of
8.87%, expected to reach US$34.11 bn by 2029
23.5
24.6
31
0
5
10
15
20
25
30
35
FY 23 FY 24 (E) FY 29 (E)
Indian Hospitality Market Size (USD Bn)
(Source: Hotelivate, IBEF, Statista)
Source: IBEF
CAGR – 4.73%
Overview of the Indian Hospitality Industry: Projected to Grow at a CAGR of 5%
Rebounding from COVID with Strongest ADR & RevPAR in a Decade
MARKET RESEARCH RASHESHWAR CONSULTANTS PRIVATE LIMITED

4. 4
Three-Star Hotels
58.40%59.80%
63.30%64.80%65.70%66.20%66.10%
34.40%
49.90%
66.10%65%
0%
20%
40%
60%
80%
FY 2014FY 2015FY 2016FY 2017FY 2018FY 2019FY 2020FY 2021FY 2022FY 2023FY 2024
(E)
Five-Star Deluxe Hotels
59.90%
61.70%
64.30%65.00%66.50%66.80%66.50%
31.90%
49.10%
67.50%
0%
20%
40%
60%
80%
FY 2014FY 2015FY 2016FY 2017FY 2018FY 2019FY 2020FY 2021FY 2022FY 2023
Four-Star Hotels
59.10%
61.20%
64.20%
66.00%66.90%66.90%66.80%
37.70%
52.70%
66.90%
0%
20%
40%
60%
80%
FY 2014FY 2015FY 2016FY 2017FY 2018FY 2019FY 2020FY 2021FY 2022FY 2023
Nation-Wide Average
57.90%
59.80%
64.80%65.20%65.10%
67.30%
64.60%
34.70%
47.90%
63.90%
0%
20%
40%
60%
80%
FY 2014FY 2015FY 2016FY 2017FY 2018FY 2019FY 2020FY 2021FY 2022FY 2023
*Average Rate: 59.92%
*Average Rate: 60.84% *Average Rate: 59.12%
(Source: Hotelivate, HVS)
Occupancy Rates in the Indian Hotel Industry: Overall Average & Classification Insights
Four-Star Hotels leading with 60.84% Average Rate over Last Decade
*The COVID-19 pandemic led to a decline in
tourism, causing lower occupancy rates due to
travel restrictions, health concerns
MARKET RESEARCH RASHESHWAR CONSULTANTS PRIVATE LIMITED

5. 5
Five-Star Deluxe HotelsNation-Wide Average
Average Daily Rate (ADR) Analysis in the Indian Hotel Industry
Nationwide Trends & Classification Breakdown, with maximum growth in Five Star Deluxe Hotels
5,611 5,532 5,527 5,671
5,768 6,038
6,104
4,630 4,951
6,869
8,200
-
2,500
5,000
7,500
10,000
FY 2014FY 2015FY 2016FY 2017FY 2018FY 2019FY 2020FY 2021FY 2022FY 2023FY 2024
(E)
8,727 8,815 8,881
10,099 10,260
10,660 10,679
8,293
8,914
12,923
-
4,000
8,000
12,000
16,000
FY 2014FY 2015FY 2016FY 2017FY 2018FY 2019FY 2020FY 2021FY 2022FY 2023
Three-Star Hotels
Four-Star Hotels
4,474
4,361 4,424 4,505
4,635 4,713
4,827
3,694
4,037
5,481
-
1,500
3,000
4,500
6,000
FY 2014FY 2015FY 2016FY 2017FY 2018FY 2019FY 2020FY 2021FY 2022FY 2023
3,083 3,039
3,155
3,016
3,200
3,371
3,474
2,703
2,920
3,885
-
1,500
3,000
4,500
FY 2014FY 2015FY 2016FY 2017FY 2018FY 2019FY 2020FY 2021FY 2022FY 2023
(Source: Hotelivate, HVS)
19% 45%
36%
33%
MARKET RESEARCH RASHESHWAR CONSULTANTS PRIVATE LIMITED

6. 6
Five-Star Deluxe HotelsNation-wide Average
RevPAR Trends in the Indian Hospitality Industry
Post-COVID Growth Surpassing Pre-COVID Levels across all Hotel Classifications
Three-Star Hotels
Four-Star Hotels
(Source: Hotelivate, HVS)
3,275 3,310
3,499
3,677
3,791
4,000 4,033
1,597
2,471
4,540
5,249
-
2,000
4,000
6,000
FY 2014FY 2015FY 2016FY 2017FY 2018FY 2019FY 2020FY 2021FY 2022FY 2023FY 2024
(E)
5,231
5,438
5,715
6,560
6,825
7,125 7,103
2,645
4,377
8,723
-
2,500
5,000
7,500
10,000
FY 2014FY 2015FY 2016FY 2017FY 2018FY 2019FY 2020FY 2021FY 2022FY 2023
2,643 2,669
2,840
2,975
3,099 3,151 3,223
1,393
2,127
3,667
-
1,500
3,000
4,500
FY 2014FY 2015FY 2016FY 2017FY 2018FY 2019FY 2020FY 2021FY 2022FY 2023
*Covid19 Impact
1,786 1,817
2,044
1,965
2,083
2,268 2,245
938
1,399
2,483
-
1,000
2,000
3,000
FY 2014FY 2015FY 2016FY 2017FY 2018FY 2019FY 2020FY 2021FY 2022FY 2023
16% 99%
72% 77%
MARKET RESEARCH

7. 7
The Supply Landscape 2023-24: Key Trends from Hotel Signings in India
275 Hotels Signed, Adding 30,000 Keys, with the Majority in Leisure Locations of Tier 3 Cities
275
Hotels
30,000+
Inventory
Hotels Signings by Origin of Brand
15,000
14,500
Domestic
International
Hotels Signings by Positioning
9%
28%
19%
24%
20%
Budget
Midmarket
Upper Midmarket
Upscale
Hotels Signings by City Tiers
6,000
10,000
14,000
-
5,000
10,000
15,000
Tier 1 Tier 2 Tier 3
Hotels Signings by Type of Location
Top 5 Cities
1.Bengaluru
2.Jaipur
3.Goa
4.Navi Mumbai
5.Mumbai
Top 5 States
14,000
16,000
Urban
Leisure
1.Maharashtra
2.Karnataka
3.Uttar Pradesh
4.Gujarat
5.Himachal Pradesh
Key Trends
❖Tier 3 cities are leading the growth in
hotel signings due to their remote and
underdeveloped locations, making them
ideal for leisure tourism
❖Due to a notable shift in consumer
preferences towards experience travel,
hotel companies are moving from
business to leisure markets and
expanding into smaller cities to meet
rising demand and address the lack of
quality offerings
❖Hotel operators are adapting to changing
consumer preferences by launching new
brands and diversifying segments. ITC
introduced the Storii brand, IHCL is
expanding into alternative
accommodations with amã Stays & Trails,
catering to the growing demand for
homestays & villa rentals
Overview of Hotel Signings in India for FY’24
(Source: Hotelivate, HVS, BW Hotelier)
MARKET RESEARCH RASHESHWAR CONSULTANTS PRIVATE LIMITED

8. 8
The Supply Landscape in 2023–24: Key Insights from Hotel Openings in India
Domestic Developers Lead Hotel Openings, with Mid-Market and Upper-Market Segments Dominating Share
Tier 2 & Tier 3 Growth
Significant inventory increases
with about 4,500 keys in Tier 2 and
4,200 in Tier 3 cities, while Tier 1
cities added around 3,300 rooms,
mainly in Mumbai and Bengaluru
Midmarket Dominance
Midmarket and upper midmarket hotels
each accounted for 29% of openings,
followed by budget at 18% and upscale
at 17%, with luxury hotels at
approximately 7%
Domestic Operator Leadership
Indian operators opened around 8,000
keys, outpacing international
operators, who opened about 4,000
keys.
Regional Distribution
North India led with 37% of openings,
followed by West at 33%, South at
20%, and East at 10%
Urban vs Leisure Location
Urban areas contributed 7,000
keys, compared to 5,000 in leisure
locations
Top Cities & states
Maharashtra, Rajasthan, Karnataka,
Uttar Pradesh, and Gujarat each added
nearly 1,000 keys, with Mumbai,
Bengaluru, Goa, Jaipur, and Amritsar as
the leading cities
1 2 3
4 5 6
In FY’24, around 190 hotels opened, adding over 12,000 keys across 113 cities. Some key insights include:
MARKET RESEARCH RASHESHWAR CONSULTANTS PRIVATE LIMITED
(Source: Hotelivate, HVS)

9. Valuation Multiples

10. 10
Deals in the Hospitality Sector in India: FY’24 Overview
1
Target: Ayushi & Poonam Estates LLP, a real
estate and rental company in India, owning the
Courtyard by Marriott Aravalli Resort in the
NCR region
Acquirer: Chalet Hotel, part of the K Raheja
Corp group, is an owner, developer, & operator
of high-end hotels in key metro cities across
India
Deal: Chalet Hotel acquired 100% stake of
Courtyard by Marriott Aravalli Resort, 158-room
property, across 8 acres
Deal Value: INR 315 Cr,
Value Per Room: INR 2 Cr
Analysis: Capitalizing on the trend of
developers moving towards branded hotels,
Chalet Hotels is expanding its portfolio in the
NCR, home to India’s busiest airport and a high
volume of foreign tourists in Delhi
2
Target: The Golden Palm Resorts & Spa,
Bengaluru, a 5-star hotel
Acquirer: BCM Group, an Indian conglomerate
with diversified business including hospitality.
Its existing portfolio include 5-star properties
such as Sheraton Grand Palace in Indore, Le
Meridien in Surat, & 450+ key Taj Hotel in Indore
Deal: BCM Group acquired 100% stake from
World Resorts Limited
Deal Value: Undisclosed
Analysis: As consumer preferences shift
towards leisure and luxury properties, the
luxury hotel segment is expanding. To
capitalize on this trend and strengthen their 5-
star portfolios, companies are pursuing
strategic acquisitions
3
Target: Tree of Life Resorts, runs boutique
hotels in 14 locations in India with inventory of
200 rooms
Acquirer: Ambuja Neotia Group, engaged in
real estate, hospitality, education & healthcare
Deal: Ambuja Neotia Group acquired hotel
assets in Varanasi, Jaipur, & Agra
Deal Value: INR 80 Cr
Value Per Room: INR ~1.7 Cr
Analysis: With rising domestic footfall and
increased per capita income, developers are
expanding their presence in Tier 2 and 3 cities.
These markets have also seen improved
occupancy rates and RevPAR post-COVID
Observing the Shift of Developers and Investors Towards Branded and Luxury Hotels in Tier 2 and 3 Cities
MARKET RESEARCH RASHESHWAR CONSULTANTS PRIVATE LIMITED

11. 11
Valuation Multiple: Listed Premium Hotel Segment
Company Name Net SalesEBITDA
EBITDA
%
PAT PAT%
Market
Cap
EV
EV/Sales
x
EV/EBITDA
x
P/E x ROCE
The Indian Hotel Co Ltd 6,853 2,197 32% 1,174 17% 1,01,057 1,02,307 14.9x 46.5x 78.6x 18.0%
Hotel Leela Ventures Ltd 199 27 14% 11 6% 1,170 1,088 5.4x 40.3x 49.7x 6.4%
Oriental Hotels Ltd 383 87 23% 30 8% 3,073 3,252 8.4x 37.3x 75.1x 13.0%
Chalet Hotels Ltd 1,456 615 42% 226 15% 19,543 22,416 15.2x 36.4x 78.1x 15.5%
EIH Ltd 2,540 907 36% 518 20% 23,292 22,850 9.0x 25.1x 36.6x 22.4%
Advani Hotels & Resorts Ltd 104 32 31% 21 20% 697 690 6.6x 21.5x 29.1x 45.7%
Asian Hotels (North) Ltd 297 71 24% -95 -32% 343 1,341 4.5x 18.8x - 9.3%
Taj Gvk Hotels & Resorts Ltd 409 129 32% 88 22% 1,974 2009 4.9x 15.5x 21.2x 20.9%
Mean 33.2% 16.1% 8.6x 30.2x 46.1x 18.9%
Median 7.5x 30.8x 43.1x 16.8%
MARKET RESEARCH RASHESHWAR CONSULTANTS PRIVATE LIMITED
(Source: Screener)
INR Cr

12. 12
Valuation Multiple: Listed Mid Market Hotel Segment
Company Name Net SalesEBITDA
EBITDA
%
PATPAT%
Market
Cap
EV
EV/Sales
x
EV/EBITDA
x
P/E xROCE
ITDC 499 87 17% 50 10% 5,789 5,220 10.4x 60.0x 88.1x 6.1%
Lemon Tree Hotels Ltd 1,111 528 48% 164 15% 9,784 12,066 10.8x 22.8x 67.5x 16.9%
EIH Associated Hotels Ltd 382 108 28% 63 16% 2,407 2,371 6.2x 21.9x 49.5x 24.5%
Sayaji Hotels Ltd 115 32 28% 8 7% 632 682 5.9x 21.3x 45.7x 15.0%
Benaras Hotels Ltd 118 50 42% 32 27% 1,039 992 8.4x 19.8x 28.7x 37.3%
Mahindra Holidays & Resort
(India) Ltd
2,743 533 19% 9 0.3% 7,857 10,303 3.7x 19.3x 65.4x 21.8%
U P Hotels Ltd 141 38 27% 22 16% 780 727 5.2x 19.1x 29.3x 29.7%
Royal Orchid Hotels Ltd 298 74 25% 30 10% 995 1,144 3.8x 15.4x 20.9x 20.6%
Kamat Hotels (India) Ltd 308 81 26% -2 -1% 593 823 2.6x 10.1x 47.1x 20.4%
Mean 26.8% 6.6% 6.4x 23.3x 49.2x 21.4%
Median 5.9x 19.8x 47.2x 20.6%
MARKET RESEARCH RASHESHWAR CONSULTANTS PRIVATE LIMITED
(Source: Screener)
INR Cr

13. Thank You
Rasheshwar Consultants Pvt Ltd
Rachit Chowdhary
Director & Founder
Email: [email protected]
Phone:[phone]