HVS ANAROCK’s report ‘Room for Growth’ says that hotels sector relies heavily on the aviation sector from demand perspective. The rising disposable income, low-cost carriers & air connectivity through UDAN scheme has resulted in significant growth of air passenger traffic in India. India is set to become the world’s third-largest aviation market by 2024-25, but the total size of the branded hotels segment in the country is ~140,000 rooms, smaller than the total inventory of Shanghai.
Rising disposable income combined with the introduction of low-cost carriers and the improving air connectivity through the UDAN scheme has resulted in significant growth of air passenger traffic in India. The hotels sector relies heavily on the aviation sector from demand perspective, with a high degree of correlation between growth of hotels sector and that of airline traffic. The growing aviation market will continue to be a strong catalyst for the hotels sector.
