Transcription
And let's welcome in Sanjay Sati. He now looks at the hotel sector as closely, I'm sure, but without the stress of managing the day-to-day profitability. And therefore, Sanjay, it's great to get you today. Uh, thank you so much for being with us. How do you assess what happens to growth for the sector, uh, if indeed the conflict were to come to an end? Because that would be one trigger, but over the slightly longer term, we've seen that the businesses or the stocks have consolidated, even if there has been growth in the last, let's say, 24 months.
Uh, good morning. It's a pleasure to be back. Uh, yeah, you're right. I think the last, uh, couple of months have been a little bit of a downer. Um, but the industry is resilient. We're seeing domestic demand continue to stay strong. Uh, in fact, whilst I don't have the main industry numbers as yet, uh, the April numbers, which I thought will be lower, have actually come out better than expected. And I'm looking at the average room rates across the country right now. And Goa, Bengaluru, Ahmedabad, Mumbai, Pune, Chandigarh, and Cochin have actually performed significantly better on the average room rates in the month of April. On the occupancy side, um, I've seen, I see Goa has done extremely well. Mumbai, Hyderabad, Kolkata, and Gurugram have done well too. Um, the cities that have struggled with occupancies in the month of April were actually Bengaluru and Kochi, and not surprisingly, given that, uh, especially Bengaluru, which has a very high element of foreign tourist arrival or, or foreign footfalls as far as business travel is concerned, that it hasn't done as well. Um, I think May is going to be significantly better. My assessment is that whilst April grew at about five, six percent, uh, May is likely to grow at double-digit numbers, uh, for sure.
Sanjay, before I ask you my question, I must say that I have a complaint. This is Alex here. It's over six months and the the Christmas cake that you made with Nirj around Christmas time, I only got to see it on the screen and I'm, I, I didn't get a taste of it. But so that's my complaint. But having said that, the, I want to, I want to get your opinion on the MICE space, which is from the context of what Prime Minister Narendra Modi said about oil prices being high, about various other things, and work from home. All of that. Is that a pocket where you will take a little time to recover, or are we likely to see a very robust improvement there now that it seems to be dissipating?
Um, my guess is that the second half will be very, very strong. Uh, there is pent-up demand that's been created in on account of the last couple of months. Um, and, um, uh, I, I see a very strong edge to for the industry, subject to, of course, the Middle East, uh, or the, or the West Asia conflict, uh, you know, now sort of easing off. Uh, as far as the cake is concerned, we got to fix that for sure. Maybe we can do this at home together.
Sure, I look forward to that.
Okay. Sanjay, good morning. This is Zalia. You know, the question over here is, now, all this while, because of the West Asia crisis, what everyone was anticipating was that yes, there could be an impact on the external, the international front, but domestic, there could be some bit of green shoots that could be emerging as well. Uh, you know, resorts, that was the theme that is being played around. So if you have to look at the hospitality sector from a domestic market perspective, uh, what are the trends [clears throat] indicating right now?
Well, the trends indicating that the holiday market stays strong. Uh, May and June has seen some great occupancies across the holiday destinations. Rates continue to grow. Uh, business travel, as far as domestic is concerned, uh, was on a bit of a wait and watch. I think it's come back now.
Okay. So specifically in terms of the domestic tourism, because there was an anticipation, uh, that this would see, in, in certain pockets, this would see a greater degree of demand because people will choose purely from the perspective of, of travel not to the West Asia region and certain other pockets that there was a cloud of uncertainty on, and also the depreciation of the currency and the expense therein, domestic tourism ISM would get a fillip. Do you see that trend continuing towards the end of this year as well?
Yes, I do. Because, you know, most of the international travel, typically for Indian outbound is from now right up to October. And I think that's going to be, some part of it is going to be diverted with to domestic destinations. And that's why we see, uh, stories, uh, not very pleasant one, of huge traffic jams in Ladakh and Leh over the last few days. But that's just an indication that people are spending, uh, more of their holidays within India now. And I believe, uh, the segment will also see a very robust, uh, rebound, uh, in the coming months.
Um, Sanj, for long, at least we out here on the, on the anchor side, or the anchor table, have debated whether the growth will be in the premium room categories or in the mass categories. That debate always stays for real estate, affordable housing versus luxury housing, and the same for the hotel rooms as well. Right? I'm trying to understand where is it that you see the next leg of growth, uh, to be large. Will it be in the premium categories or otherwise?
I think it's going to be all around. Um, probably, uh, the, the sweet spot is likely to be just below luxury, upper upscale, upscale sort of category, because that's where the foreign tourist travels, I mean, outbound travelers will probably migrate to. Uh, and therefore, I see demand going up there. Business travel in India largely travels in that segment, up upscale and upper upscale, just below luxury, and therefore, I continue that, continue to believe that that'll stay strong. And I think it's very true for MICE also, except weddings, which tend to lean towards luxury hotels. Uh, the non-wedding MICE business tends to be more in the upper upscale, uh, uh, positioned hotels.
Sanjay, 30 seconds, but you would have done a fair bit of traveling recently for people who are looking for those ideas within India, right? Because we, we, you spoke about how maybe people are doing the Indian circuit, which is the very interesting, offbeat, unknown destination, or even a known destination, but you really liked it that you did recently. 30 seconds, please.
So, uh, you know, last couple of months, I've done the traditional Goa a couple of times. We have a home there. Um, done Mussoorie, done Dehradun. But what's been interesting is the offbeat locations around Goa and Mussoorie, which were really fun to go. And I think that's going to play out very well. I've heard great news from Kashmir, by the way. Um, Pahalgam, Srinagar are all packed, which is, which is wonderful news for us.
Wonderful news for us. But offbeat destinations around Goa, around Mussoorie, viewers, that's a cue if you're thinking of a holiday and want to think of offbeat destinations. Sanjay Seti, uh, the final word on travel, literally, if you will, for me. I just gave you a couple of things. Thank you so much, Sanjay, for joining today. Really appreciate your time.