100 hotels signed in 2020

Signings were especially low in the first half of the year, due to the uncertain market conditions and challenges related to closing deals on virtual platforms. Only 100 new hotels with 9,757 keys were signed in 2020 as compared to 170 new hotels with 16,349 keys in 2019.

Neha Rawat

In the aftermath of the ongoing pandemic, brand signings by keys in India witnessed a year-on-year decline of 40% in 2020. Signings were especially low in the first half of the year, due to the uncertain market conditions and challenges related to closing deals on virtual platforms. As a result, only 100 new hotels (with 9,757 keys) were signed in 2020 compared to 170 new hotels (with 16,349 keys) in 2019. In addition to this, 35 hotels (with 2,676 keys) were rebranded in 2020 compared to 53 hotels (with 4,521 keys) in 2019.

Domestic vs. international

Domestic hotel operators signed more properties (61% of the total signings by property) than their international peers, with an average key count of 82 keys during the year. In a shift in strategy, international hotel operators also showed a keenness in signing smaller properties in 2020, as they adapted to the changing market dynamics and looked at increasing their footprint in smaller cities. Consequently, the average key count for international hotel operators declined to 108 keys in 2020 compared to 140 keys in 2019.

Management contracts

Management contracts continued to be the preferred form of brand signings, accounting for 80% of the total signings by keys in 2020. However, franchising is steadily strengthening its position and accounted for 17% of the signings by keys in 2020 compared to 14% in 2019. Leasing and other forms of contract continued to lose their charm over the year.

Brown vs. green projects

In the year marred with uncertainty, hotel operators preferred to sign projects that were less risky and had a higher chance of completion compared to greenfield projects. Several greenfield projects were also put on hold due to COVID.

Rebranding likely to grow

Hotel rebranding or conversion is also gaining momentum in the country and accounted for 26% of the total signings by properties in 2020. Rebranding is likely to grow rapidly going forward as more and more independent hotels seek brand affiliation to gain from the ‘safety’ shield perceived for brands by travellers.

Midscale segment is the most preferred segment in the country, accounting for 41% of the total signings by keys in 2020, followed by upscale (37% of total signings), economy (11% of total signings) and luxury (11% of total signings). Though commercial destinations continued to witness the majority of signings (49% of total signings by keys), leisure destinations picked up pace in 2020 as hotel companies renewed their focus on increasing footprint at such destinations in the post-COVID era. Approximately 41% of the total hotel signings by keys in 2020 were in leisure destinations compared to 30% in 2019.

Decline in brand signing

Brand signings by keys witnessed a year-on-year decline of 40% in 2020 in the aftermath of the pandemic. During the year marred with uncertainty, 100 new hotels entered the branded hotels market, while an additional 35 hotels were re-branded. Domestic operators continued to sign more properties vis-à-vis their international peers, but in a shift in strategy, international operators were also keen on signing smaller properties, and looked at increasing their footprint in smaller cities”