As travel rises, hotel corporations invest heavily in tourist and pilgrim communities.
ImprovingĀ domestic leisure travelĀ has promptedĀ hotel chainsĀ to expandĀ room inventoryĀ over the past few years. A major noticeable trend is that hotel companies are expanding in tier-II and smaller towns faster than the metro regions.
The share of hotel rooms in the tier-II and tier-III cities increased to 38% of the total inventory at the end of 2022 from 33% four years ago according to a recentĀ HVS-AnarockĀ report.
The share of hotel rooms in metros reduced to 19% from 30% during the period.
Cities such as Agra, Haridwar, Manali,Ā McLeodĀ Ganj, Kasauli, Katra, Mahabaleshwar, Puri, Pushkar, Rishikesh, Tirupati and Vrindavan reported the opening of new hotels in the mid-market and upscale segments.
Travel trendsĀ such as weekend getaways, road trips, staycations (vacation close to home), workation (leisure trip in which work is an add-on) and bleisure (a business trip which gets extended to a leisure trip) have boosted leisure travel in the past two years. This is also reflected in the rising trend in air travel, which grew by 60% year-on-year in FY23.
The rising travel to smaller cities is likely to benefit listed hotels such asĀ Indian HotelsĀ andĀ Lemon Tree Hotels, which have a fairly strong presence in mid-market and upscale segments.