Hotels Sector Check – July 2022 Industry RevPAR 5% Above Pre-Covid Levels: ICICI Securities

According to the India Hospitality Industry Overview 2019 by HVS Anarock, the hospitality sector was expected to perform at similar levels of growth as witnessed in CY19 fuelled by a swift recovery and demand pick-up in the second half of CY20. However, with the sudden disruption in business due to successive Covid waves in CY20 and CY21 globally and across India, the hospitality industry has seen a lot of volatility in occupancies and room rates over the last two years.

As per HVS Anarock, industry occupancies fell below 50% in Jan’22 owing to Omicron impact before recovering to ~55% in Feb’22 and 61% in Mar’22.

This momentum carried forward into Apr’22 with occupancies reaching ~65% (same as Apr’19) of pre-Covid levels and Apr’22 RevPAR at Rs3,803 or 103% of Apr’19 levels.

May’22 industry RevPAR of Rs3,744 was 10% higher than May’19 (pre-Covid levels) while Jun’22 industry RevPAR of Rs3,803 was 12% higher than Jun’19 levels.

In Jul’22, while industry ARRs were 8% higher than Jul’19 levels at Rs5,750, overall occupancy declined by 200bps in Jul’22 to 63% vs. 65% in Jul’19 resulting in Jul’22 industry RevPAR of Rs3,623 or 105% of Jul’19 levels.