Hotel demand soars as travellers return

In the peak season of April to June, the hotel has recorded an occupancy rate of 91%, with most days sold out. The resort achieved an average daily room rate of ₹40,000 this summer, surpassing previous records. Families are travelling despite steep airfares, contributing to the exceptional performance, said Vinit Chhabra, the hotel’s general manager.

Long queues of cars and traffic jams on the highways to hill stations have become common, with many families stuck for hours on the roads. This demand surge has been partly fuelled by the preference among Indians for domestic vacations this year.

An increasing number of Indians have favoured domestic vacations due to soaring international airfares and accommodation costs, further fuelling the post-pandemic local travel rebound. In addition, delays in visa approvals for Europe and other Western countries are prompting Indians to opt for local travel or visa-friendly destinations in Southeast Asia.

Locations in India are running absolutely full, travel agencies said, despite the high room rates. Other businesses in the Kashmir valley, such as Skyview by Empyrean at Patnitop in Jammu, saw a 29% increase over last season. Both its tourist ropeway lines and its cottage rooms have reported 95% occupancy in the past two months. It is averaging 14,000 travellers a month on its leisure ropeway project located at a two-and-a-half-hour drive from Katra.

Many other destinations, such as those in Himachal Pradesh and some in the South, have clocked three times the revenue in the period from the preceding three months. Locations like Mussoorie, Kodaikanal, and Chikmagalur led the surge with almost a fivefold surge in bookings over the previous quarter, followed by Munnar in Kerala, said online travel agency, Cleartrip. The prices have been 15% higher than last year, but this has not dampened demand.

Manu Sasidharan, the head of hotels and accommodation at Cleartrip, said summer travel drove profitability for the entire industry. “It has been strong from a summer travel perspective, and we advanced the demand with a scheme we ran in March for the season," he said.

Similarly, Yatra.com saw a 30-35% jump in domestic hotel bookings and a 20-25% increase in the domestic air travel segment between April and June from a year earlier. But the hill station growth is far more staggering. It has seen between a 50-60% surge in demand for popular hill stations such as Manali, Nainital, Mussoorie, Kashmir, Leh, and Ladakh in April-June 2023 versus the corresponding quarter in 2022, and this has also resulted in an increase in airfares to these locations by 40-50%.

But rising hotel rates could dampen demand in the coming years. This year’s summer travel in India has been an interesting study in contrast because of the extremes in hotel and airfare rates. While international bookings are yet to achieve pre-covid levels and bookings are down by 34%, domestic bookings recovered quickly post covid outbreak to about double the 2019 levels, said Arun Ashok, the India head of curated travel company, Luxury Escapes.

“There has been a steep increase in hotel fares this summer compared to last summer, and while international package prices went up on average by 11%, domestic prices were up a staggering 38%," said Ashok, also regional head for India and the Middle East. About 16% of its domestic orders are for north Indian hill stations.

Indiver Rastogi, the president and group head of global business travel for Thomas Cook (India) Ltd and SOTC Travel Ltd, despite the higher airfares, travel demand has seen a threefold increase this summer. In some popular city sectors going to the hills, air travel costs have shot up by 60-150%.

During the April-June period, room tariffs in popular hill stations and cooler destinations such as Srinagar, Shimla, Manali, Dharamshala, Mcleodganj, and Dalhousie witnessed a substantial surge of 70-100%, according to Thomas Cook India.