July 21, 2024

Investment in Indian Hotels Surged in 2023

Skift Take

2023 was a record year for Indian hospitality in terms of hotel investments as well as new branded hotel openings and signings.

— Bulbul Dhawan

The Indian hospitality industry witnessed investments to the tune of $401 million in 2023, real estate company JLL revealed in a new report. This was nearly four times the transaction volume recorded in 2022. 

2023 hospitality industry overview: A total of 22 hotel transactions took place in 2023, which is the largest number of assets traded in the 10 years, JLL said. One-fourth of the total investments value related to under-construction hotels in business as well as leisure destinations. 

The industry signed hotels with nearly 25,200 keys and opened over 12,600 keys in 2023. JLL added that there was a significant interest in tier-2 cities, which accounted for 54% of the total signings. Jaideep Dang, managing director, hotels and hospitality group, India, JLL, said that 2023 was a record year in terms of hotel investments as well as new branded hotel openings and signings. 

The 2024 outlook: In the first three months of 2024, India recorded hotel transaction volumes of $78 million. This was 80% higher than the transaction volumes recorded between January and March 2023. Dang believes the 2023 momentum will continue this year. 

Airports Body to Infuse $3.6 Billion Capital For Infrastructure Upgrade

The Airports Authority of India (AAI) is planning a capital expenditure of INR 300 billion ($3.6 billion) over the next five years to build and revamp the airport infrastructure in the country. 

The statutory body is also expecting its highest-ever turnover in the 2023-24 financial year, projected at INR 150 billion ($1.8 billion). Sanjeev Kumar, chairman, AAI, said that the body is likely to report a INR 50 billion ($600 million) profit before tax.

Kumar added that by 2047, Indian airports are likely to cater to 3 billion passengers a year. The aviation industry in India is experiencing a significant boom. Between 2014 and 2023, the number of airports in India doubled while the number of passengers carried has risen from 60 million to over 150 million.

Online Business Travel Platform Tumodo Enters India

Corporate travel platform Tumodo has launched its operations in India. Established in 2023, the company has recently received funding of $35 million. Tumodo is aiming to capture a 5% market share in India by 2027, an ET report said

A recent report by Global Business Travel Association (GBTA) said that India’s business travel spending is expected to reach $38 billion this year. Globally, India is the ninth-largest market for business travel expenditure.

New Airline Directive Allows Passengers to Deboard Flight in Case of Delay

The latest airline directive allows passengers to deboard a plane in case of flight delay caused by poor weather. The Bureau of Civil Aviation Security (BCAS) issued the directive last week. Before this, airlines could keep passengers for up to 12 hours on ground while waiting for departure. 

Zulfiquar Hasan, director general, BCAS, said that airlines and security agencies concerned will take the decision regarding deboarding of passengers. In case of an airline not deboarding the passengers, airport security can direct them to do so. 

Brij Hotels Aiming to Operate 50 Boutique Hotels in Next Five Years

Brij Hotels aims to have 50 operational boutique hotels in the next five years. The company currently has eight operational properties in its portfolio. An ET report said that Brij Hotels recently raised $4 million in funding, and is planning another round of funding in a year.

A report by HVS ANAROCK said that the global boutique hotel segment has grown 50% over the last three years. The company is currently witnessing a 50-55% occupancy growth, and is expecting this to increase. 

Vistara to Reduce Flight Operations Amid Cancellations, Delays

Full-service carrier Vistara is planning to temporarily reduce its flight operations, Indian news agency PTI reported. This comes as the airline is witnessing flight cancellations and delays due to non-availability of pilots. Vistara canceled nearly 80 flights on Monday and more than 190 were delayed. 

The Ministry of Civil Aviation has accordingly sought a detailed report from the airline on the situation. Aviation regulator Directorate General of Civil Aviation has also asked Vistara to submit daily reports on the delays and cancellations.

Media reports have said that the airline’s pilots are not reporting to work to protest against the new pay structure. Vistara’s new pay structure aligns with that of sister airline Air India’s ahead of their impending merger. 

Photo Credit: Radisson Hotel Group opened Uday Palace Navsari, a member of Radisson Individuals, in 2023.

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