I read about the hotel sector for the first time

So today in The Daily Brief I wrote about the hotels sector. ICRA had released a note saying that the revenue per room available for hotels would go up ~10%, how the demand for the hotel rooms are increasing and that there aren’t enough rooms to meet the demand of the people. What that means the supply (hotel rooms) is less than the demand (people wanting hotel rooms).

Now, the next question is why not just have more hotel rooms (at least that’s a question that came to my mind immediately) but the thing is constructing a hotel takes time. You can’t GPT your way to making more hotels.

There are a bunch of interesting things about the hotel sector that I have covered in The Daily Brief, you can check it out here. Since I read through a bunch of things to write a piece, there are few interesting things that dont often make it to the piece. Here’s what didn’t make it to the piece. One fascinating trend is how hotel operators, once laser-focused on the luxury segment, are diversifying their offerings. Companies are now catering to a broader audience with upscale, midscale, and even economy options. A CareEdge report says this:

Over the years the supply concentration in the luxury-upper upscale segment has reduced from 39% in FY15 to 32% in FY23 and is expected to reduce further to 26% by FY28 as majority new supply is coming in Upscale, Upper midscale and Midscale/Economy sections

This marks a deliberate shift in strategy by hotel companies to attract more middle-class travelers by offering a wider range of options that fit different budgets.

This was the first time where I had written something on the hotel sector so my understanding is still preliminary, but this is my trigger to learn and go deeper to find out interesting things. More so because hotels are one of the categories that gives a good on how well the economy is doing—I say this because people spending on things that are not necessities like hotels is a sign that people have more disposable income and that is usually considered a very good sign.