The year 2023 was a record year for the Indian hospitality industry, with investments totaling $401 million, nearly four times the volume recorded in 2022. The industry saw 22 hotel transactions, the highest in a decade, with a significant portion of investments going towards under-construction hotels in both business and leisure destinations. In addition, hotels with over 25,200 keys were signed, and over 12,600 keys were opened in 2023. Tier-2 cities saw a surge in interest, accounting for 54% of total signings, showing the growing potential in these areas. The outlook for 2024 remains positive, with the first three months of the year already showing an increase in hotel transaction volumes compared to the same period in 2023.
The Airports Authority of India (AAI) is planning a capital expenditure of $3.6 billion over the next five years to build and revamp airport infrastructure in the country. This investment comes as the aviation industry in India continues to experience significant growth, with projections indicating that Indian airports could cater to 3 billion passengers annually by 2047. In the 2023-24 financial year, AAI is expected to achieve its highest-ever turnover of $1.8 billion, with a projected profit before tax of $600 million. This investment in airport infrastructure is crucial to support the increasing demand for air travel in India.
Corporate travel platform Tumodo has entered the Indian market with a recent funding of $35 million. The company aims to capture a 5% market share in India by 2027, as business travel spending in the country is expected to reach $38 billion this year. With the global business travel expenditure ranking India as the ninth-largest market, Tumodo is strategically positioned to tap into this growing segment. As the economy continues to expand and businesses become more globalized, the demand for efficient corporate travel solutions is on the rise.
A new airline directive has been issued allowing passengers to deboard a flight in case of delays caused by poor weather. This change comes as a relief to passengers who previously could be kept on the ground for up to 12 hours while waiting for departure. The decision to deboard passengers will be made jointly by airlines and security agencies, with airport security having the authority to intervene if necessary. This directive aims to improve the overall passenger experience and ensure that travelers are not unduly inconvenienced during delays.
Brij Hotels, with plans to operate 50 boutique hotels in the next five years, has recently raised $4 million in funding. The company currently has eight operational properties in its portfolio and aims to expand further in the boutique hotel segment. The global boutique hotel segment has seen a 50% growth in the last three years, indicating a strong demand for unique and personalized accommodation options. With occupancy rates expected to rise, Brij Hotels is well-positioned to capitalize on this trend and establish itself as a key player in the hospitality industry.
Amid flight cancellations and delays due to pilot shortages, full-service carrier Vistara is planning to reduce its flight operations temporarily. The airline has faced challenges with non-availability of pilots, resulting in numerous flight disruptions. An alignment of pay structures with sister airline Air India has also led to friction with pilots, who have been protesting against the changes. The Ministry of Civil Aviation and the Directorate General of Civil Aviation have requested detailed reports from Vistara on the situation, highlighting the need for effective management of operational issues to ensure smooth operations and passenger satisfaction.
