Growing contribution from domestic consumers
Domestic consumers are making a growing contribution to the development of the luxury hotels category in India. Rising demand amongst local consumers is underpinned by increasing disposable incomes and the growing tendency for consumers to take short local breaks or staycations because of hectic lifestyles and limited leisure time.
Relaxation of Visa regulations set to boost inbound tourism
As well as benefiting from growing demand amongst domestic consumers, the luxury hotels category is set to be bolstered by an increase in inbound tourist numbers supported by the relaxation of visa regulations in 2019. The new regulations simplified the situation facing visitors by combining some existing categories, such as project and employment visas, medical attendant and medical visas, internship and research with student visas, and sports with business visas.
Trend towards smaller botique hotels
The development of smaller, boutique hotels was a notable trend towards the end of the review period. The emergence of this trend is being supported by an increasing interest in unique high-end experiences and local authenticity on the part of both domestic and inbound tourists.
Category leader IHCL enters new segment
The leading player in luxury hotels, IHCL, is looking to enter new segments in line with evolving demand trends. In 2019, IHCL launched the Ama Trails & Stays brand, “a group of heritage bungalows, guesthouses and homestays at unique locations across the country”.
GST reduction to boost demand
In October 2019, the GST on high-end hotels was slashed from 28% to 18%. The previous high tax rate had meant that it was often cheaper to go overseas than to luxury resorts in India.
Increasing interest from foreign luxury brands
A growing number of foreign players are targeting the growth potential of the Indian luxury hotels category. Based in Canada, Fairmont Raffles plans to open 20 hotels over eight years to 2026, including hotels under its luxury brand, Fairmont, in Jaipur and Hyderabad.
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Source : Euromonitor