India to see demand for over 3 lakh rooms for G20 meetings, says apex hotel body

India's G20 presidency has led to many meetings of foreign delegates across many cities including Mumbai

India's G20 presidency is driving demand in the hotel industry, with over 300 meetings being held across 56 locations in the country that are expected to be attended by more than 1.5 lakh delegates from 29 nations.

India officially took over as the leader of the Group of 20 countries, which has 19 nations and the European Union as its members, on December 1, 2022. Non-member countries and international organisations, too, are invited. The country will host ministers, officials and finally heads of state during the year-long presidency.

"Indirect requirement during the G20 meetings will be of 150,000 to 200,000 room per night," said KB Kachru, Vice President, Hotel Association of India (HAI) & Chairman Emeritus & Principal Advisor, South Asia Radisson Hotel Group.

The total number of rooms booked would vary between 100,000 a night for 300 meetings and about 200 rooms booked for two to three nights, he said.

We are booked

While only the meeting cities would see the G20 demand, these would bring to the forefront of the global tourism map several lesser-known destinations and heritage sites in the country, he said.

The meetings are being held in not only metropolitan cities like Delhi and Mumbai and state capitals like Lucknow but also at tourist and historical sites like Udaipur, Agra, Varanasi and Hampi.

"There will be a significant increase in demand for hotel rooms in these areas, which is expected to drive up costs, particularly in urban areas and during peak travel seasons," he said.

Uptick in rates

In key business cities, room rates for five-star hotels went up by about 20 percent since the last quarter of 2022, according to industry estimates.

The meetings of several G20 working groups started in December 2022 and will end by the last quarter of the year 2023. The year-long event is expected to drive demand for the hotel industry.

In the fourth quarter of the calendar year 2022, Bengaluru saw the steepest RevPAR (revenue per available room) growth of 110.6 percent from the year-ago period.

RevPAR is derived after multiplying a hotel's average daily room rate by its occupancy rate.

Other markets like Delhi, Chennai and Mumbai saw RevPAR growth of 94.3 percent, 82 percent and 105.3 percent, respectively. The occupancy in these markets increased in the range of 11-16 percent.

"A rise in international arrivals is also expected in FY23 as compared to FY22, which opens multiple windows of opportunity for the industry, Kachru said.

The G20 summit would open new growth avenues for the Indian travel and hospitality ecosystem and bolster the demand for high-quality accommodation.

“This will also add to the industry performance in FY23 in terms of occupancy, (and) room rates which is expected to grow by a minimum of 15 percent this year. Inbound tourism, MICE, and in-person meetings will see significant growth,” he said, referring to meetings, incentives, conferences and exhibitions.