BackCricket World Cup to drive surge in hotel and airline fares in India: Jefferies
The matches are also scheduled at a time when India is in the middle of the festive season
PremiumNew Delhi: The upcoming Cricket World Cup in India is driving up airfares and hotel prices in the country as cricket fans pre-plan their travel and book match tickets in advance, Jefferies said in a report released on Wednesday.
The Cricket World Cup is returning to India after a gap of 12 years, driving up demand for match tickets and building anticipation around the sporting event that commences on October 5. The matches are also scheduled at a time when India is in the middle of the festive season.
"The World Cup event is coinciding with the seasonally strong third quarter for the hospitality industry. We checked hotel and flight rates across the venues for matches featuring India and found average rates for the match days up by 150% for select hotels and 80% for select flights compared to the week prior to match day, with some rates up to the extent of 13 times or 5 times. For non-India match days, fares escalation is lower vs normal days," the report said.
The ICC Cricket World Cup 2023 is a 46-day international tournament with the participation of 10 countries; it is scheduled to be held in India from October 5 to November 19.
Five matches each will be held in Ahmedabad, Bengaluru, Chennai, Delhi, Dharamsala, Kolkata, Lucknow, Mumbai, and Pune, and three in Hyderabad. In India, large cricket events tend to drive up consumption as consumers buy large-screen television screens and stock up on food and alcohol; in this case, fans are spending money to watch matches in-stadia.
Earlier this month, the Board of Control for Cricket in India (BCCI) released approximately 400,000 tickets for the highly anticipated tournament after fans scrambled to get tickets.
Meanwhile, Jefferies said that hotels in smaller cities are already running out of inventory. "While major cities are seeing very significant increases in hotel rates, our interactions at hotels in small cities like Dharamsala suggest that rooms are completely sold out for multiple days. The rooms are booked for players, support staff, cricket board officials, media, etc., apart from booking from spectators. Our checks with reservation desks of many hotels in bigger cities also indicate that occupancies for match days are already running high, which has resulted in rates rising sharply, and rates are likely to mostly increase further closer to match dates," it said.
Hotels in general are reporting a steeper escalation in fares compared to airlines.
"While it is still early days for occupancies and rates as half of the matches are still more than one month away, the sequential growth looks much steeper for hotels vs airlines as of now," it added.
With the World Cup matches coinciding with the festive period, the hospitality industry is slated to benefit from the same, Jefferies said in its report.
The Durga Puja-Navratri festival (in October) is peak season in Kolkata with hotel occupancy rates generally higher during the 10-day-long festival, which attracts tourists from other parts of India and abroad. The World Cup cricket schedule appears to be made in a way that there are no matches in Kolkata or Ahmedabad during the Puja-Navratri holidays. As a result, occupancies for Kolkata-Ahmedabad hotels are likely to be higher for a prolonged period during this festival season, it said.
"The peak occupancy days for airlines are during festival seasons when rates go up sharply, whereas for hotels, the second half of December are days of peak occupancy and higher rates. With the World Cup matches coinciding with the festive period, the hospitality industry is slated to benefit from the same. Hotels in business centers tend to see lower occupancies during festival days, but World Cup matches this year are fueling occupancy rates even during festive days," analysts at Jefferies said
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