HVS Market Report – Mumbai Hotel Market

The recovery in Mumbai’s hotel industry is finally underway. Keep reading to learn more.


The hotel industry in Mumbai, India’s financial hub, is finally experiencing a sustained recovery fueled primarily by a boom in corporate travel and high-priced conferences and events. For example, thanks to the IPL and some conferences held in the city in April and May 2022, the city’s occupancy rate exceeded 80% for the first time since the pandemic, and the city has not looked back since.

Mumbai had the highest occupancy rate of 71-73% in October 2022, 18-20 percentage points (pp) higher than the same period in 2021 and just 4-5 points behind 2019 occupancy. YTD October 2022 average rates were only 3-5% lower than pre-pandemic levels and 74-77% higher than in the same period in 2021. Strong increases in occupancy and average rates allowed RevPAR to exceed INR 5,500, representing growth almost 140% compared to 2021.

Mumbai Hotel Industry: Monthly RevPAR Recovery Through Pandemic

Chart - Mumbai Hotel Industry: Monthly RevPAR Recovery Through Pandemic

Source: HVS Research

According to the latest industry data, room demand in the city increased by more than 37% year-on-year between January and October 2022, while room supply increased by less than 1%. This trend is expected to continue in the near future as Mumbai is a major corporate hub and is home to major financial institutions such as Reserve Bank of India, National Stock Exchange of India, Mumbai Stock Exchange, leading public and private sector. banks, global private equity firms and the celebrity entertainment industry, and therefore attracts large numbers of business and leisure travelers all year round. Additionally, the city’s hotel industry is expected to benefit from the gradual resumption of inbound tourism in the country, the Maharashtra government’s strong focus on boosting tourism throughout the state, and the city’s hotel supply increasing at a slower rate of 1-3%. Just over 4,000 are expected to be added to the city’s current supply of approximately 25,000 keys over the next six to seven years. Luxury and luxury hotels, which make up approximately 60% of the total quality inventory in the city, create a significant development opportunity in the medium-sized and economic segments. Additionally, the Mumbai accommodation market lacks differentiated accommodation assets such as boutique and long-stay hotels, which contribute significantly to demand segmentation in mature international markets.

With a positive demand outlook, limited supply additions, and anticipated support from conventions and infrastructure initiatives planned for the city, the future of Mumbai accommodation market is very promising. We expect the Mumbai hotel industry to end 2022 with 73-75% occupancy and an average of INR 8,000-8,200.

Mumbai Hotel Industry: Quarterly Performance

Chart - Mumbai Hotel Industry: Quarterly Performance

Source: HVS Research; F = Estimate

Mandeep S.Lamp, Chairman – South Asia oversees HVS implementation in South Asia. Mandeep spent more than 30 years in the hospitality industry working with International Hotel Companies such as Choice Hotels, IHG and Radisson Hotels before becoming President of ITC Fortune Hotels in 2001. Having successfully built the Fortune brand in the mid-sized hospitality industry of India, Mandeep has been in entrepreneurial ventures for more than 8 years by establishing joint venture companies with Dawnay Day Group UK and Onyx Hospitality Thailand, and joined JLL in 2014 as the Managing Director of South Asia Hotels and Hospitality Group. before joining. An established industry leader, Mandeep has won many awards and recognition for his achievements. Recently, Hotelier India was featured in the India Power List for the second time in a row, which includes India’s most respected hoteliers. Contact Mandeep at +91 981 1306 161 or mlamba@hvs.com.

Dipti Mohan, Senior Manager – Research with HVS South Asia is a seasoned knowledge professional with extensive experience in research-based content creation. He has written various ‘point of view’ documents such as thought leadership reports, expert opinion articles, white papers and research papers. Contact Dipti at dmohan@hvs.com.

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