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India hotel survey reveals key findings regarding performance opportunities, profitability

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MUMBAI—India’s hotels are heavily dependent on food and beverage (F&B) as a revenue generator, and have a significant opportunity to boost foreign and leisure demand, according to findings from the 21st edition of the Federation of Hotel & Restaurant Associations of India (FHRAI) Survey report.

The report, produced by STR and Horwath HTL, is based on survey responses from 475 hotels comprising 36,029 hotel rooms for the 2017-18 financial year.

“The financial data analysed in this report is based on several different parameters, such as star category, inventory size classification, chain affiliation, independent hotels, etc.,” said Vijay Thacker, Managing Director, Horwath HTL India. “This gives a clearer and diverse understanding of the operating statistics of India’s hospitality sector. For example, GOP levels have headroom (and need) for improvement—these are the highest for 5-star deluxe hotels at 39.6%, stay above 30% at the 4-star level and for independent hotels with more than 50 rooms, but drop to 24.9% and 22.0%, respectively, for 3-star hotels and independent hotels of up to 50 rooms. Going forward, we endeavour to bring amendments on reporting parameters and data points so as to enhance the quality of the survey and data presented.”

“Overall, hotel performance in India is thriving with India’s macros, which have been intact and looking up all through the year,” said Vidhi Godiawala, STR’s Business Development Manager, Central & South Asia. “The hotel industry is riding on the back of the country’s resilient growth story with demand seen picking up from domestic travelers. With more disposable income and a rising middle class, Indians are traveling now more than ever before. And this reflects not just in the report’s KPI findings, but also the impact of F&B consumption as an overall contributor to hotels revenues.”

Key findings from the report include:

  • F&B and banquet operations were significant contributors to revenue (42.3% of total revenue). Interestingly, revenue contribution from F&B outlets increased for the 4-star and lower category hotels. This appears to be a contradiction to the expectation of lower-tier hotels being more select/limited service in character combined with lower rates. On the other hand, these figures reflect the F&B revenue potential in markets outside of the cities.
  • Revenue from F&B outlets contributed 37.8% of total revenue in hotels with up to 50 rooms. This is higher than the total F&B contribution (outlets plus banquets) at hotels of larger size. Together with banquets, hotels with up to 50 rooms gain half of their revenue from F&B operations.
  • Foreign guests represent only 22.8% of total hotel business. Goa and Mumbai are just past the 30% mark in terms of share of foreign guests. Delhi is higher, but still below 40%.
  • The Leisure segment represents 41.5% of the country’s overall demand share—this reflects opportunity for greater development and operation in this segment.
  • Supply increases in recent years have led to lower average daily rate (ADR). Specifically, ADR for 5-star, deluxe hotels was below INR9,500, while 5-star and 4-star hotels reported ADR of INR5,700 and 4,100, respectively. These figures reflect India as a very affordable destination, although tourism numbers have not grown in a commensurate manner.
  • Revenue per available room (RevPAR) for chain-affiliated hotels is 2.09 times the RevPAR for independent hotels
  • Gross operating profit (GOP) levels for 2017-18 remained comparable with 2016-17, but EBITDA margins are lower on account of higher management fees and other fixed charges, which is representative of a larger sample of branded management and franchise properties in the 2017-18 report.

Please CLICK HERE to purchase the complete FHRAI Survey report.

About STR
STR provides premium data benchmarking, analytics and marketplace insights for global hospitality sectors. Founded in 1985, STR maintains a presence in 15 countries with a corporate North American headquarters in Hendersonville, Tennessee, an international headquarters in London, and an Asia Pacific headquarters in Singapore. For more information, please visit

About Horwath HTL
Horwath HTL is the world’s largest and most experienced hospitality consulting brand, with 45 offices around the globe. Starting in New York in 1915, we have been providing impartial, specialist advice to our clients for over 100 years and are recognised as the market leader in all areas of hotel, tourism and leisure consulting. As the founders and original authors of the Uniform System of Accounts, the industry standard for hospitality accounting, Horwath HTL wrote the book on how the industry measures financial performance in hotels.


Media Contact:
Vidhi Godiawala
Business Development Manager
Central & South Asia, STR
+91 22 66311472