Indian hospitality investments to exceed $2.3 billion over the next two to five years: CBRE

According to the first-ever hospitality study published by real estate consulting firm CBRE South Asia, Indian hospitality investments are probably going to reach $2.3 billion over the next two to five years.

The overall investment between 2020 and 2023 is expected to top $0.4 billion, according to the report “Indian Hospitality Sector: On a Comeback Trail,” published on Wednesday.

There will likely be 12,000 new hotel rooms created in 2023, and by 2025, the number of hotel rooms is anticipated to increase at a CAGR of 3.3%.

According to the survey, the hotel industry is on the mend thanks to a successful immunization campaign, the opening of borders, the lifting of travel restrictions, and solid economic development.

According to projections, demand recovery will continue to outpace supply growth, which is good news for the key performance indicators of the hotel industry. Instead of being concentrated in a small number of locations and marketplaces throughout the next few years, demand is projected to be more evenly distributed and widespread. For the upcoming several years, CBRE anticipates this consistent supply increase to continue.

One of the major forces behind the Indian hospitality sector’s expansion in recent years has been an increase in investor interest.

All industry KPIs, including occupancy rates and revenue per available room (RevPAR), are anticipated to approach pre-pandemic levels this year, the survey adds. When compared to 2021, India’s RevPAR increased by 94% in 2022. In 2022, the hotel industry in India reportedly had increased foot traffic and a consistent increase in income, pointing to a seamless recovery from the epidemic, the research claims.

According to Anshuman Magazine, chairman and CEO of CBRE for India, South-East Asia, the Middle East, and Africa, major foreign hotel chains have made large investments in the nation in recent years in an effort to meet the nation’s expanding demand for hospitality services. “Several PE firms have also made investments in domestic and foreign hoteliers wanting to increase their presence in the nation. The sector has benefited from the government’s ongoing emphasis on reforms, and as a consequence, the administration anticipates that the country’s tourism and hospitality sectors will generate USD 50.9 billion in tourist exports by 2028.

According to Rami Kaushal, managing director of consulting and valuation services for India, the Middle East, and Africa at CBRE, after a nearly two-year slowdown, demand for the hospitality sector has been steadily increasing due to the tapering of COVID-19 restrictions, pent-up demand, and India’s relative affordability compared to other top global destinations. As well as heightened attention on domestic, medical, and religious tourism, the growing popularity of ‘bleisure’ (business and leisure) travel has given us a peek at what the future may hold for this industry. The operational components of COVID-19 have also undergone significant adjustments, giving the hotel industry freedom to develop, he continued.