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Buoyed by post-pandemic travel trends and rising disposable incomes, India's hotel industry is expected to maintain its growth momentum, going forward

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The past three years have witnessed a remarkable turnaround in the fortunes of India's hotel industry. This is evident in the industry's improving performance, highlighted by a huge rise in key metrics.

A recent study by hospitality research firm Hotelivate revealed a dramatic shift in travel and tourism's contribution to India's Gross Domestic Product (GDP). This contribution jumped from -20.2% in 2019 to 18.3% in 2022, signifying a remarkable recovery.

The positive trend extends to room rates, with the industry average surging nearly 40% to ₹ 6,869 in FY23 compared to ₹ 4,951 in FY22. Occupancy rates have also witnessed a dramatic rise, climbing from 34% in FY21 to a healthy 66.1% in FY23. Given this impressive turnaround, investors are naturally curious: will this growth momentum sustain? Analysts, keeping the current positive indicators in mind, believe the Indian hotel industry's growth is likely to sustain even in FY25. Let's look into this positive outlook.

Several factors have contributed to the massive improvement in India's hotel industry. Recent studies suggest a shift in travel habits. Post-pandemic, people seem to value experiences more, recognizing the impermanence of life. Growth, happiness, and money are now viewed differently - not at the expense of health and time. The Indian hotel industry has benefited from this newfound appreciation for travel.

People are now more spontaneous, planning trips around long weekends and holidays. This surge in travel following the coronavirus pandemic-induced lockdowns has been termed "revenge travel" and significantly boosted hotel demand. This focus on "revenge travel" gradually evolved into a deeper desire for self-discovery.