G20 presidency gives a big boost to India's travel, hospitality sector; hotels see demand for 3 lakh rooms

A hotel room in Conrad, Bengaluru: Image: Hilton

India's G20 presidency, which has completed 100 meetings, is boosting the domestic travel and hospitality industry, with hotels seeing increased bookings and a substantial surge in hotel room pricing.

This is the biggest boost to India’s hospitality sector since the lifting of pandemic restrictions in 2021, according to industry players.

"The G20 summit has opened great business avenues and opportunities in the long run. The hospitality industry is on the way to recovery and has started to meet the pre-Covid levels," said Somesh Agarwal, MD of Radisson Blu Palace Resort, Udaipur.

Through the pandemic, Dubai had the fair (Dubai Expo), which turned out to be a good opportunity for the country as it acted as a catalyst for a buoyant Dubai, pointed out InterGlobe Hotels president and CEO JB Singh speaking to Moneycontrol on the sidelines of Hotel Investment Conference - South Asia (HICSA) 2023.

"Similarly, G20 is a big event that will not only boost the hospitality industry but also the country. It has come at a very good time as we are getting out of the pandemic impact," he said.

According to a government statement, in-person participation during India's G20 Presidency is among the largest ever with over 12,300 delegates from over 110 nationalities attending the G20-related meetings so far.

"With the arrival of guests and dignitaries, travel bookings surged strongly this year and we saw a threefold increase in the number of bookings to New Delhi as many foreign ministers arrived alongside other important diplomats to be a part of the G20 meet," said Nishant Pitti, CEO and Co-founder, EaseMyTrip, an online travel operator.

He said bookings have increased by two times their normal numbers due to the G20-related bookings.

Similar is the scenario for hotels that are seeing an increase in demand as over 300 events will be hosted in 56 places around the country, with more than 1.5 lakh delegates expected to participate.

More check-ins

India is estimated to see demand for over 3 lakh rooms for G20 meetings, according to Hotel Association of India (HAI).

It is estimated that over 100,000 hotel rooms bookings will be recorded across hotels in India for 300 G20 meetings. The indirect requirement during the meetings will be 150,000 to 200,000 rooms per night.

India's G20 presidency has provided a new commercial opportunity to hotels, said Pitti, adding that to accommodate these activities, reservations are made in advance and most five-star and luxury properties are running completely booked.

"We hosted about 100 delegates from different countries and about 40-60 people from the organising team of the Ministry of Parliamentary Affairs and Department of External Affairs. The meeting was spread across 3 days, most delegates came a day prior while a few stayed over a couple of days post the meeting," noted Agarwal of Radisson Blu Palace Resort.

Agarwal said due to the demand from G20 meetings they expect a flood of new businesses in the near future.

Another hotel chain Wyndham Hotels & Resorts, which has properties in many host cities for the G20 presidency, including Bengaluru, Chandigarh, Chennai, Khajuraho, Kolkata, Lucknow, Mumbai, and Udaipur, is seeing positive demand momentum in every location where G20 is held.

"We continue to see hotel bookings until November across the country. As most of our hotel properties are booked to host G20 meetings, we have recorded a 15-20 percent increase in revenue this year so far," said Nikhil Sharma, Market Managing Director, Eurasia, Wyndham Hotels & Resorts.

Rising room rates and revenue

He said that average room rates have increased significantly, accounting for a 15-20 percent increase since the start of G20 meetings in December last year versus 2021. "This has driven growth in RevPAR (revenue per available room)," Sharma added.

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

Pitti said the surge in room pricing is more evident for business hotels that get reservations of 10 or more rooms at a time. "From the last quarter of 2022, prices for five-star hotel rooms in India's key corporate centres have increased by almost 20 percent," he added.

G20 meetings so far have been held in places including Bengaluru, Pune, Kolkata, Jodhpur, Khajuraho, and Chennai.

In the fourth quarter of the calendar year 2022, Bengaluru saw the steepest RevPAR growth of 110.6 percent from the year-ago period.

Other markets such as 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.

More growth opportunities

Pitti noted India's attempts to market itself as a global MICE (Meeting, Incentives, Conferences and Exhibitions) destination has coincided with the G20 leadership. "The successful arrangement and conclusion of these over 200 meetings will aid in that endeavour," he said.

G20 is a big driver for the hotel industry and the credit goes to the government for the timing, said Alan Watts, president, Asia Pacific, Hilton. “India should be excited about its self-sustainable tourism industry and a big part of that are events and meetings," he said.

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

"In 2022, the FTA (foreign tourist arrivals) rate was six million in India. This was four times the number in 2021. The over 200 G20 meetings, which are high-profile in nature, will provide a year-long ascending chart for FTA rates in India, as several of these diplomats and delegates from G20 member and guest countries will attend these meetings. Also, India will have the opportunity to turn each delegate into a spokesperson for its tourism industry," said Pitti.