INDIA, November 22, 2023: Booking.com, one of the world’s leading travel brands, in collaboration with Statista – a business intelligence firm, has released the inaugural ‘Indian Accommodation Barometer 2023’ report. As the Indian tourism industry slowly returns to normal, the report highlights the growing confidence across the travel accommodation sector with nearly 50% of hoteliers feeling ‘positive’ about their current economic development and future prospects; and more than half sharing this view with respect to the past six months.
Business sentiment among Indian accommodation providers continues to remain strong with nearly half (49%) reporting an increase in average room rates and an even higher number (55%) reporting an increase in occupancy rates over the past 6 months. The gradual return of international travellers, along with the opportunities presented by digitalization and interest in sustainable travel, also bolsters this more upbeat mood.
Consumer Spending Trends: Shorter stays and longer booking windows
According to the survey results, when it comes to the consumer spending trends observed by hoteliers in India, they’ve reported that more than two-thirds of guests (67%) are booking shorter stays, closely followed by 66% who are booking further in advance. According to what they are seeing, 63% of customers prefer to book less expensive rooms and 60% opt for more restrictive cancellation policies to save money. Just over half (52%) of the respondents stated that guests are spending less on extras and 42% avoid peak season stays.
Opportunities and challenges heading into 2024
- Eagerly awaiting inbound travel to return to normal, Indian accommodation providers see international tourists as providing the most growth potential. 88% of respondents see attracting international tourists as one of the biggest business opportunities in 2024.
- Attracting families (78%), offering local experiences (72%), attracting more domestic travellers (72%) and spiritual tourism (64%) are the other leading opportunities Indian hoteliers are excited about going forward.
- Gastronomical experiences play an important role in the industry’s profit margins, with 39% of accommodation providers claiming food and beverages make a significant contribution to the business while only 5% mentioned that serving food and beverages reduced revenue. Less than a quarter (16%) claimed that they do not serve food or beverages at all. Adapting to changing food preferences is also important with 41% of accommodation businesses stating that featuring vegan and/or vegetarian food on their menu is becoming more important.
The Indian accommodation industry faces a multitude of challenges, however, concerns about operating costs are currently most front-of-mind. For respondents, the top two challenges were the cost of energy (74%) and taxation (73%). These are followed by staffing costs, economic uncertainty and the cost of investments.
Investment in sustainability a higher priority than digital transformation and AI
Indian hoteliers’ positive business sentiment is translating into their willingness to invest in areas that can help better prepare their business for the future. The majority of hoteliers are becoming more environmentally conscious and realising the importance of investing in sustainability measures and ways to decarbonize their operations.
- Accommodation providers say they are investing in different sustainability categories: energy efficiency tops the list (46%), followed by waste reduction (45%) and water preservation (26%).
- One in five (20%) hoteliers also share that they are taking initiatives to reduce greenhouse gas emissions caused by their accommodations and 16% say they are working towards the preservation of natural resources.
- 24% reveal that they are supporting the local economies by sourcing their products and services locally.
- Fiscal and tax incentives were deemed by two-thirds (62%) of Indian hoteliers surveyed to be the most important factor supporting the hospitality industry’s efforts to become more climate-friendly and sustainable.
While machine learning and artificial intelligence are dominating the headlines, only a very small minority (3%) of Indian accommodations currently make use of AI-powered business tools such as chatbots and dynamic pricing algorithms. Although AI adoption is expected to grow, with 25% of respondents looking to introduce such tools in the coming six months, more than 71% of respondents still do not yet have any plans to use AI in how they run their businesses.
According to Santosh Kumar, Country Manager for India, Sri Lanka, Maldives and Indonesia at Booking.com, “2023 has been a year of recovery and optimism for the Indian hotel and holiday rental operators. The positive outlook reported in the inaugural Indian Accommodation Barometer 2023 is a testament to this sector’s resilience. It is encouraging to see a strategic shift towards sustainability, wherein accommodation providers are prioritising energy efficiency and waste reduction, paving the way for the evolving and conscious traveller. ”
Claudia Cramer, Director Market Research Insights, Statista said, “Following initial signs of revival in 2022, travel and tourism continue on the recovery course in India in 2023. Despite ongoing challenges, Indian hoteliers are excited about the return of international tourists and are embracing the digital and green revolution.”
Visit the following link to download the full Indian Accommodation Barometer Report 2023. Download graphs and stand-alone images here.
