- Hotel investments in India surged 67 percent.
- IHG partners Adani Airports for five hotels.
- Marriott plans 180 properties, 30,000 rooms addition.
Hotel investments in India rose 67 percent to $567 million last year, according to JLL. India currently offers one hotel room for every 3,000 people, compared with one for every 60 in the United States, which gives a sense of just how much room there is to grow. Demand is forecast to grow about 11 percent annually over the next several years, outpacing supply, according to Bloomberg.
The pace of new deals in recent months tells a similar story. IHG said in May it would work with Adani Airports to develop five hotels at key aviation hubs and bring its Kimpton brand to India for the first time. Accor plans to bring its Mantis brand to a tiger reserve in Karnataka. Hilton and Wyndham both signed agreements in April for properties in fast-growing smaller cities. Each of these deals points to how broadly the expansion is spreading, well beyond the major metros.
One of the biggest drivers behind this growth is religious and spiritual tourism. More Indians are making pilgrimages and they are staying longer. Pilgrims now often spend two to four nights at a destination, combining temple visits with sightseeing and social events, rather than making a quick trip and leaving. Marriott said around 11 percent of its roughly 220 hotels in India cater to temple visitors, while Hilton said about 15 percent of its 94-strong India portfolio sits in spiritual hubs.
"The religious tourism alone fills the season, and the rates alone are astronomical," Clarence Tan, Hilton senior vice president, Asia Pacific development told Bloomberg. "I see the demand continuing to grow due to rising affluence and people's increasing interest in reconnecting with cultural and religious roots."
Rajeev Menon, Marriott president, Asia Pacific excluding China said pilgrims are increasingly turning short visits into longer stays.
"Now people are staying two to four nights because they are doing social events there, they are doing a little birthday party and sightseeing," he said.
The broader data on bookings and rates is striking too. Five-star hotel bookings more than doubled in April compared to a year earlier, while family hotel bookings rose 125 percent, according to Cleartrip data shared with Bloomberg. Hotel room rates climbed as much as 25 percent in popular destinations and demand for premium spots from Goa's beaches to Kashmir's mountains rose as much as 20 percent for the summer season, according to the Indian Association of Tour Operators.
Marriott plans to add 180 more properties creating 30,000 rooms over the next few years, making India its fastest-growing Asia Pacific market after China. The industry's construction pipeline reached a record 906 projects last year, representing about 118,000 additional rooms, trailing only the U.S. and China.
Still, risks remain. India's stock market benchmark dropped nearly 14 percent this year, which could make some consumers more cautious about big-ticket spending. Inbound visitor arrivals totaled about 9.2 million last year, a relatively small number for the world's most populous country.
Recently Marriott and CG Hospitality Global signed an agreement to develop three hotels in Kathmandu and Siliguri
