South India drives growth for hotel brands

According to HVS Anarock’s India hospitality industry overview, on a pan India basis average room rates rose 7-9 per cent in 2024 led by strong demand.

Hotels in South India saw the highest year-on-year gains in RevPar (revenue per available room) among the top cities in CY 24 and the growth momentum is continuing this year too as demand outstrips supply.

RevPar is a hospitality industry metric that refers to revenue generated per hotel room whether occupied or not. It helps hotel operators in their pricing strategy and analyse the sales performance.

“RevPar growth for April YTD (year to date) is over 20 per cent and continues to grow strong for the rest of Q2 despite the recent impact on demand from travel advisories in a few markets,” said Hemant Tenneti, Market Vice President (South & East India, Bangladesh and Sri Lanka), Marriott International.

Growth in Chennai supported by its strong automotive manufacturing base and emerging role in EV infrastructure, Tenneti said..

A surge in commercial leasing and improved air connectivity is also helping to drive business and transient demand across Bengaluru, Chennai and Hyderabad, he added.

According to HVS Anarock’s India hospitality industry overview, on a pan India basis average room rates rose 7-9 per cent in 2024 led by strong demand. As such nationally RevPar grew 10-12 per cent year-on-year. Hotels in Hyderabad, Chennai and Kochi saw the highest year-on-year increase in RevPar in 2024. While the Hyderabad market topped the chart with a 20-22 per cent rise, Chennai came second with a 16-18 per cent growth followed by Kochi which registered a gain of 15-17 per cent. With 12-14 per cent growth, the hospitality market of Bengaluru stood seventh. Among the main markets Ahmedabad and Goa saw the least RevPar growth.

India as a hub

“With India’s ascent as a hub for global capability centres, Hyderabad has been at the forefront of this transformation. The surge in demand coupled with limited new supply has led to a significant uptick in market performance. Kochi made a remarkable resurgence in 2024 driven by a combination of domestic leisure travel and its growing reputation as a wedding destination,” HVS Anarock said

As of March, India had around 200,000 branded hotel rooms and a pipeline of over 109,000 keys that are expected to come into operation in the next five years.

According to HVS Anarock, Bengaluru is the biggest hospitality market in South India with around 17,000 rooms with a pipeline of another 8,000 rooms. Chennai’s current hotel room supply is around 9000 rooms and with a CAGR of 2.13 per cent ( FY 2020 – 2025), the market has seen slowest addition in inventory compared to Bengaluru, Hyderabad and Kochi.

 “We’re witnessing a strong upswing in performance across South Indian markets, led by the remarkable momentum in Chennai. The city has recorded a robust 15 per cent year-on-year increase in RevPar, driven by sustained corporate travel, MICE (meetings, exhibitions, conference) segment, and a steady rise in domestic leisure demand. Kochi too is showing healthy traction, with a 5–7 per cent uplift in RevPar,” said Rahool Macarius, Market Managing Director (Eurasia), Wyndham Hotels & Resorts.

Radisson Hotels too shows strong growth in South India markets. “Hyderabad and Chennai have delivered 12 per cent growth led by transient travel and a revival in meetings and events. Bengaluru, however, has emerged as our top performing market delivering nearly 20 per cent growth largely driven by transient demand such as corporate stays and an uptick in leisure travel,” added Nikhil Sharma, Managing Director and COO, Radisson Hotel group (South Asia).   

Published on May 29, 2025

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