MARKET REPORT

India Hotel Market Review - H1 2018

AUGUST 2018

Mumbai

Delhi NCR

Pune

Chennai

Hyderabad

Goa

+13.0%

+2.8%

+0.9%

+8.8%

+6.7%

+4.6%

Source: STR

India Major Cities

Ahmedabad+0.8%

Kolkata+1.8%

Bengaluru+3.0%

Jaipur+3.4%

Kochi+4.4%

India Hotel Market Review Market Report - H1 2018

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India Hotel Market Review - H1 2018

This report briefly examines the performance of hotels in India in the half year from Jan - June 2018. Additionally, we have changed the focus of the report to present two interesting aspects:• performance in H1-18, of hotels that were reported for

H1-17, so as present an ‘apples- to apples’ comparison. • performance in H1-18 of hotels that were opened in

2017 - thus giving an idea of the level of penetration that these hotels achieved over their initial months of operation.

Market Performance H1-18Market-wide occupancy, ADR and RevPAR were at 65.9%, Rs. 5,868 and Rs. 3,868 respectively. The movement was positive, across all three parameters.

The key positive news from this performance is:• Mumbai occupancy up significantly, to 78%;

and ADR crossed 8k level• New Delhi and Pune occupancy crossed 70%,

while also gaining 8% in ADR• Goa occupancy moved up by +2.1 pts,

however ADR was flat• Bengaluru and Jaipur had good ADR growth,

comfortably crossing the 6k and 5k levels respectively• Kochi ADR grew 7.2% - but the market will struggle due

to the unfortunate floods• Hyderabad grew RevPAR by 6.7%, mainly on

improved occupancy.

Markets that faced challenges are:• Gurgaon, with ADR and RevPAR decline• Chennai and Ahmedabad with less than

1% RevPAR growth• Chandigarh, where rate decline has materially

neutralised occupancy growth

India Key Markets - RevPAR Growth (H1 2018 vs. H1 2017)

Performance of Hotels reported in H1-17If we look only at hotels which were included in our H1-17 report, the all-India performance is:

H1 - 2018Occupancy 68.5Average Daily Rate (Rs.) 6,018RevPAR 4,124

Source: STR

These results are really heartening because:• Occupancy has moved into the high 60’s• ADR levels have crossed 6k, on all India level• RevPAR has crossed 4k, on all India level• Occupancy for Feb 18 was at 77.1%, up 2.3 pts from

Feb 17 and +6.3 pts over Feb 15

Source: STR

13%

13%

17%

22%

24%

11%Luxury Class

Upper Upscale Class

Upscale Class

Upper Midscale Class

Midscale Class

Economy Class

India Hotel Market Review Market Report - H1 2018

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Performance of Hotels which opened in 201785 chain-affiliated hotels, with about 10k rooms added in 2017. 4.5k rooms opened in H1-17 and 5.5k rooms in H2-17.

The segmental composition of this supply was significantly in the midscale and upper midscale segments; in fact, the mid-tier combined with upscale hotels comprised 74% of new supply – the reason for stressing this is to more appropriately set the expectations for ADR.

2017 Openings

Source: Horwath HTL Research

The performance of these hotels is reflected in the following charts. Occupancy Trend

Source: STR; Note: Data for Jan and Feb 2017 are not available due to insufficient participation.

ADR Trend

Source: STR; Note: Data for Jan and Feb 2017 are not available due to insufficient participation.

Increasing robustness of the market is clearly reflected as the hotels have been able to achieve higher occupancy, ADR and resultant RevPAR.

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

2017 2018

0

1,000

2,000

3,000

4,000

5,000

6,000

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

2017 2018

AD

R (in

INR)

India Hotel Market Review Market Report - H1 2018

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STR is the source for premium data benchmarking, analytics and marketplace insights. We provide data that is reliable, confidential, accurate and actionable, and our comprehensive solutions empower our clients to strategize and compete within their markets. Our range of products includes data-driven solutions, thorough analytics and unrivalled marketplace insights, all built to fuel business growth and help our clients make better operational and financial decisions.

STR is continuously working to enhance our product offerings while shaping the future of industries. We maintain a presence in 15 countries and collect data for more than 59,000 hotels across 180 countries.

Shivendra SelvamAccount ManagerSTRsselvam@str.com Tel: +91 22 6631 1480

Horwath HTL is the global hospitality consulting brand of Crowe Global. Crowe Horwath HTL Consultants Pvt. Ltd. is a member of Crowe Global, an international network of independent accounting and consulting firms with 600 offices in 120 countries - ranked 8th globally.

Horwath HTL has 45 offices in 39 countries across Asia Pacific, North and South America, Europe, CIS countries and Africa. The consulting experience of our team in India, covers over 100 Indian cities, towns and destinations and 20 international destinations. Assignments have been undertaken for hotel chains, promoters, development companies, private equity investors and international lenders.

Ramnath Swaminathan Associate Director Horwath HTL India rswaminathan@horwathhtl.comTel: +91 22 6631 1477

If you have any questions or wish to learn more about Horwath HTL and STR, please do not hesitate to contact us.

www.horwathhtl.com

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