Unlocking Investment Opportunities in the Booming Indian Hospitality Industry

The upcoming ICC World Cup 2023 has set the stage for a travel industry boom in India. Fans’ unquenchable desire to witness live matches has led to a surge in travel interest and accommodation searches. Airbnb data reports an astounding 4,000% increase in accommodation searches in Ahmedabad, driven primarily by the much-anticipated India-Pakistan match. International cricket enthusiasts from the UK, Australia, and New Zealand are spearheading this travel frenzy, with cities like Bengaluru, Pune, Lucknow, and Kolkata also witnessing a remarkable uptick in accommodation queries.

The hospitality sector is experiencing unprecedented growth, with hotel bookings skyrocketing and hotel rates reaching astonishing levels. On match days, airfares have surged by 2-3 times, while the prices of 4/5-star hotels have seen hikes of 10-15 times. Even 3-star and lower-category hotels have doubled their room rates, according to Bharatt Malik, Senior VP of Flights and Hotel Business at Yatra Online. With double-digit growth trends observed across all cities near World Cup venues, this cricket fever shows no signs of abating.

Domestic air travel has seen a 38% increase in the average number of domestic air tickets booked compared to the same period in 2022. Kolkata leads with a remarkable 104% increase, followed closely by Lucknow at 97%, Delhi at 49%, and Bangalore at 46%. While hotel rates have surged, airfares have increased by an average of 7% compared to 2022. Airlines are scaling up capacity to meet heightened demand, offering some respite from the dramatic hotel price hikes.

Host cities, especially Ahmedabad hosting the India-Pakistan match, have witnessed a 17% increase in corporate travel bookings, typically made less than seven days in advance. With domestic seat capacity at 105% in September and both domestic and international capacities at 102% in October, we anticipate substantial demand growth as the ICC opens its ticket sales platform.

The ICC World Cup 2023 has not only cast a spotlight on India’s host cities but has also kindled unprecedented excitement among fans worldwide. The soaring demand for accommodations in key match cities is indicative of the immense popularity of cricket in the Indian subcontinent. With hotel rates reaching two to three times their usual levels, Pune, Ahmedabad, and Dharamshala have seen remarkable price increases of over 300% from last year, while larger cities like Mumbai, Delhi, and Bengaluru have also witnessed surges, although to a lesser extent.

This remarkable phenomenon in the Indian travel and hospitality industry underscores the potential for savvy investors. As cricket enthusiasts from around the world flock to India, investment opportunities in luxury resorts and accommodations are rife. The surge in demand is not limited to the duration of the tournament; many travelers are expected to extend their stays to explore these vibrant host cities, promising a steady influx of tourists beyond the World Cup. Industry players like Oyo and MakeMyTrip are already gearing up to cater to this burgeoning demand, making it an opportune moment for investors to tap into India’s thriving travel and hospitality sector.