In a recent report titled ‘Hotel Investment Trends – India 2023,’ JLL India unveiled significant growth and positive trends in the hospitality sector, particularly during the first quarter of 2024. According to the report, there was a noteworthy 80 per cent Year-on-Year surge in hotel transaction volumes, amounting to USD 78 million in Q1FY24.
The sector has been on an upward trajectory since 2023, witnessing record hotel signings and openings. In 2023 alone, there were 25,176 key signings and 12,647 key openings, with a notable interest in hotel development activities shifting towards Tier-2 cities, accounting for 54 per cent of total signings.
Hotel investments in India surged to USD 401 million in 2023, marking a four-fold increase compared to 2022. A significant portion, 25 per cent of the total transaction value, involved under-construction hotels across both business and leisure destinations. Additionally, 2023 saw a milestone of 22 hotel transactions, the largest in a decade, with three hotel companies debuting on the stock market through IPOs. Greenfield projects in 2023 added approximately 13,600 keys, showcasing developers’ enduring confidence in the sector’s long-term growth potential.
Jaideep Dang, Managing Director of Hotels and Hospitality Group at JLL India, commented, “The year 2023 witnessed record hotel investments, new openings, and signings, setting a strong foundation for 2024. The sector’s enthusiasm is bolstered by the performance of hotel stocks, leading to more companies entering public markets with robust valuations. We anticipate this positive trend to continue in 2024, driven by various growth avenues such as expanding commercial markets and infrastructure development.”
The rebound in the tourism sector has been particularly notable, with global travel and tourism revenues projected to increase by 8.3 per cent in 2024, reaching almost USD 930 billion. This surge marks the highest revenue figure ever recorded in the industry, reflecting a strong resurgence following the pandemic-induced downturn.
Key highlights from the report include:
– High Net Worth Individuals (HNIs) and Institutional Capital were major contributors to hotel investments, accounting for 3 per cent of total investments.- Real estate developers constituted 27 per cent of investments, followed by owner-operators at 11 per cent.
– The upper upscale segment witnessed the highest number of key transactions, followed by upscale, luxury, and midscale segments.
– Five transactions facilitated through the insolvency resolution process under the National Company Law Tribunal (NCLT) represented 33 per cent of the total transaction value, amounting to USD 133 million.
– Management contracts continued to dominate signings, comprising 78 per cent of total key signings, with an increase noted in lease and revenue share models across different tiers, making up 4 per cent of total keys signed. Tier 1 cities experienced a notable increase of 31 per cent in key signings compared to 2022, driven by the robust performance of the commercial sector.
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A recent study conducted by technology giant Amadeus, titled ‘Travel Technology Investment Trends‘, forecasts a significant acceleration in the pace of transformation within the travel industry, with a notable 14 per cent increase in technology investment planned for the year 2024. The research, launched today, marks a pioneering effort in comprehensively analysing investment intentions and technology priorities across eight sectors of the travel industry, spanning ten global markets.
The study reveals a robust appetite for investment across the sector, with a staggering 91 per cent of surveyed travel companies expressing expectations of “moderate to aggressive” increases in investment within their organisations in 2024. Notably, airports, corporate travel managers, and hotels emerge as the frontrunners in this technological evolution, leading the charge in plans to bolster technology spend.
Key areas of focus for investment include machine learning, data analytics, digital payments, and extended reality, reflecting the industry’s commitment to driving digital efficiency and enhancing customer experiences. Noteworthy findings from the research underscore the industry’s inclination towards smarter retailing and personalization strategies to cater to evolving consumer preferences.
A significant highlight of the study is the overwhelming adoption of biometrics at airport services, with 98 per cent of airlines having already implemented or planning to implement biometric solutions to streamline airport processes.
Among the various sectors, airports lead with an average projected increase in technology spend of 17 per cent, followed closely by corporations (15 per cent) and hotels (14 per cent). Airlines, travel sellers, and travel payment departments also anticipate substantial increases, with average growth rates ranging from 12 per cent to 13 per cent.
Anticipated technological investments across key sectors
In anticipation of the year 2024, industry leaders are prioritizing smarter retailing, personalized experiences, and digital efficiency as their top technological objectives. Notable insights from respondents include:
Full-service airlines project an 18 per cent boost in revenue by transitioning to modern retailing, with an optimistic outlook on achieving the ‘Offer & Order’ transition within the next four years.
60 per cent of airports plan to implement biometrics throughout the entire airport journey within the next five years, encompassing processes such as check-in, bag-drop, lounge access, and boarding.
85 per cent of respondents from the hospitality sector foresee leveraging personalization to drive more than 5 per cent growth in incremental revenue.
NDC emerges as the leading technology for implementation among leisure travel agents over the next 12 months, cited by 40 per cent of the agents surveyed.
Corporate travel managers reveal intentions to digitize their end-to-end expense management process within the coming year.
Similarly, a third of travel payments leaders express plans to enhance global payments flows through the implementation of payments orchestration within the next 12 months.
Top priority technologies for 2024 and by 2029
Looking ahead, the research outlines the top priority technologies for both 2024 and 2029, with machine learning, data analytics, and cloud computing emerging as perennial favorites across all sectors. The findings emphasize a collective industry vision towards harnessing the power of technology to drive innovation and efficiency in the years to come.
As part of its commitment to providing comprehensive insights, Amadeus plans to release in-depth reports examining each sector explored in the research throughout the first half of 2024. These reports will delve into the specific investment intentions and technology priorities of full-service and low-cost carriers, hotels, airports, corporate travel managers, and payments, as well as travel sellers.
The study, conducted in Q4 2023 in collaboration with independent market research agency Opinium, surveyed 1,253 leading travel technology decision-makers worldwide. Representing a global perspective, the insights gleaned from decision-makers across ten key markets, including India, highlight the industry’s collective aspirations towards embracing technology-driven transformation.
Responding to ETTravelWorld’s query on investment plans in the Indian markets across travel tech, payments, and airport sector, Decius Valmorbida, President, Travel, Amadeus, commented on the investment landscape in Indian markets, noting the significant economic growth and burgeoning middle-class as driving forces behind technological advancements in the travel sector.
“With projects like the Greenfield airport in Noida and collaborations with leading airlines like IndiGo and Air India Group, India presents a fertile ground for the deployment of cutting-edge technologies such as machine learning, AI, biometrics, and retail transformation,” he said during the virtual launch event for media.
During the launch event, Francisco Pérez-Lozao Rüter, President, Hospitality, Amadeus, observed, “We know that the right technology is the key to connecting and unlocking the value of our travel ecosystem. Hoteliers, airlines and the whole sector are right to be ambitious about the next generation of technology that we are building together. Travel providers can see huge potential for a better customer experience as well as significant growth and control if they get their investment strategies right now. We can see clear ambition and commitment to evolution from this research and are excited to be at the forefront of this journey with our customers.”
During the first half of this year 2024, Amadeus will release in-depth reports examining each sector explored in the research – full-service and low-cost carriers, hotels, airports, corporate travel managers and payments, as well as travel sellers, including business travel agents, leisure travel agents and online travel agents.
This strategic move is poised to enhance the payment experience within the travel ecosystem and aligns with Amadeus’ commitment to delivering seamless travel experiences. By integrating Voxel’s solutions into its portfolio, Amadeus aims to provide a broader range of payment services for travel sellers while streamlining invoice management processes for tour operators, travel management companies (TMCs), hotel aggregators, and hotels.
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Expecting 10x growth this year in Ayodhya‘s tourism, post the ‘Pran Pratishtha’ ceremony of Ram Lalla, Rikant Pitti, Co-Founder of EaseMyTrip, announced on Sunday a five-star luxury hotel project in Ayodhya, ideally situated less than one kilometre from Ram Mandir.
“Excited to announce that we’ve just initiated a transformative project by stepping into the hospitality industry with the launch of a 5-star luxury hotel project in Ayodhya, ideally situated less than one kilometre from the Ram Mandir. This venture represents a significant investment of up to Rs 100 crore through JeewHospitality Private Limited, leading this visionary project,” he said.
The Indian online travel company’s goal is to redefine the hospitality experience for pilgrims and tourists in Ayodhya, a city rich in spiritual heritage. Positioned near the iconic Shree Ram Mandir, the forthcoming hotel is designed to meet the sophisticated expectations of visitors seeking both luxury and convenience.
In a significant move to enhance the visitor experience at pilgrimage sites, the Prime Minister recently laid the foundation stone for various projects in Assam, among them the Maa Kamakhya Access Corridor. This initiative, sanctioned under the PM-DevINE scheme, will make Assam a gateway to tourism in the North East with an increase in the footfall of devotees.
“This project, a collaborative effort between EaseMyTrip’s extensive know-how in travel and Jeewani Hospitality‘s hospitality excellence, aims to elevate the standard of luxury lodging in Ayodhya. It signifies EaseMyTrip’s strategic expansion and its commitment to enhancing India’s tourism sector,” added Pitti.The co-founder of EaseMyTrip further said that as the hospitality landscape evolves, EaseMyTrip is dedicated to delivering unparalleled travel experiences and improving India’s tourism infrastructure.
“Our upcoming 5-star hotel in Ayodhya is a reflection of our commitment to offering a blend of opulence, comfort, and cultural engagement to those visiting this historical city,” Rikant Pitti said.
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In a strategic move to reinforce its global presence, Booking Holdings, the eminent online travel giant, has unveiled its second Center of Excellence (COE) in Bengaluru, India, accompanied by a significant investment of USD 250 million over the next five years. The new COE stands as a testament to Booking Holdings’ dedication to advancing the travel experience and creating innovative solutions for customers worldwide.
Mathias Weber, Senior Vice President, Trip Division, Booking.com provided deeper insights into the company’s vision and the role of the new COE in an exclusive interview with ETTravelWorld.
Expanding Global Capabilities in Bengaluru
Weber highlighted the strategic importance of the new COE, stating, “The COE in Bengaluru is already home to over 350 employees, and we plan to scale that to 1000 employees over the next five years. India is a core market for us as a source and destination country. The talented workforce here allows us to scale our organization in a way that wouldn’t be possible in Europe.”
This facility serves as a pivotal hub for the development of capabilities that will be launched globally, emphasising the company’s commitment to offering a seamless travel experience across its diverse portfolio of brands.
Connected Trip Vision: Simplifying Travel for Users
Weber delved into the Connected Trip vision, designed to provide travellers with a seamlessly interconnected experience across various travel verticals. “We want to make booking multiple products easy from search to payment to post-booking assistance using our vast customer data to provide personalised recommendations.”
The vision aims to simplify the process of booking multiple products, including accommodation, flights, car rentals, attractions, and more, catering to the evolving needs of global travellers. Weber stressed the importance of post-booking services, stating, “We aim to empower customers to adjust, amend, or cancel reservations seamlessly across multiple verticals with just one click.”
Localisation Strategies for Diverse Markets
In response to the diverse needs of global markets, Weber highlighted the significance of localisation. “We plan to roll out these innovations across all markets, ensuring a consistent and personalized experience for users worldwide. Localisation involves tailoring content and services to make them more relevant to specific markets.”
The panel conducted at ET Travel & Tourism Conclave & Awards, sketched a future where AI, if judiciously harnessed, will drive revolutionary shifts in the travel industry, augmenting experiences while ensuring ethical, secure, journeys for global travellers. The experts in the discussion highlighted how innovation in AI intersects with ethics and human intervention and why it is important to avoid over-dependence on tech tools.
For the Indian market, this translates into scaling the attractions business and adding more relevant products to cater to the unique preferences and travel patterns of Indian users.
Future Focus: Post-Booking Services and Conversational AI
Weber also shared future focus areas at Booking.com, stating, “A big focus area is in the post-book space, to ensure we offer customers the ability to adjust, amend, or cancel reservations across multiple verticals with one click of a button.”
He also outlined plans for enhancing recommendations through vast customer data and improving search functionality with a more free-text-based approach, providing customers with greater flexibility in exploring travel options.
The inauguration of the new COE in Bengaluru reflects Booking Group’s commitment to driving innovation in the travel industry. As the company continues to invest in technology and localisation, the travel industry can anticipate more user-centric features and enhancements, contributing to Booking’s global leadership in online travel services.
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In a significant move towards diversification, EaseMyTrip.com, one of India’s leading online travel platforms, has recently acquired a non-controlling stake of approximately 13 per cent in Eco Hotels and Resorts, a BSE-listed entity operating in the hotel and hospitality industry.
Eco Hotels and Resorts, known for its commitment to environmentally friendly practices, operates carbon net zero hotels, aligning seamlessly with EaseMyTrip’s vision to broaden its portfolio and promote sustainability within the hospitality sector.
This strategic investment not only signifies EaseMyTrip’s foray into the eco-friendly segment of the hospitality industry but also opens avenues for collaboration between the two companies. Discussions are underway to explore various areas of cooperation, extending beyond hotel operations to air and non-air businesses catering to customers on the EaseMyTrip.com platform and its subsidiaries.
Nishant Pitti, Co-Founder, and CEO of EaseMyTrip, expressed enthusiasm about the partnership, stating, “We are thrilled to announce our association and strategic decision to invest in Eco Hotels and Resorts Limited, reflecting EaseMyTrip’s commitment to sustainable and responsible business practices. Our choice to invest aligns with our vision to contribute positively to the growth of eco-friendly and green hotels. This investment marks another milestone in our journey to diversify our portfolio and enhance the travel experiences we offer to our customers. By fostering environmentally conscious initiatives, we aim to shape the future of the travel and hospitality industry positively.”V K Tripathi, Executive Chairman of Eco Hotels and Resorts, emphasised the shared commitment to redefine India’s hospitality landscape through sustainability, advanced construction technology, and bold expansion strategies. He stated, “This strategic association between EaseMyTrip.com and Eco Hotels and Resorts Limited may turn out to be a game-changer as such synergy is hardly seen in the hospitality sector.”
Hotel-X integrates with major Online Travel Agencies (OTAs), such as Booking.com, MakeMyTrip, Agoda, Goibibo, Airbnb, Expedia, Yatra, ClearTrip, and more. Utilizing AI and ML algorithms, it accelerates revenue maximization through rate optimization, increased sales channels, and stress-free management for hotel owners and managers. Within three months of deployment, Hotel X users reported a 50 per cent increase in revenue and earnings.
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