Representative image of people shopping during festive season.
Credit: PTI Photo
Bengaluru: If the recently concluded July-September quarter corporate earnings raised the spectre of an urban slowdown, across sectors such fast moving consumer goods (FMCG), real estate, and automobiles, the current festive season, so far, has been enough to offset any concerns from companies.
“India, particularly from a domestic leisure perspective, has been booming. We haven't seen performance like this since well before pre-pandemic. India’s lead indicators for travel infrastructure and travel tourism are stronger than they are anywhere in Asia,” said Alan Watts, President, Asia Pacific (APAC), Hilton, to DH, speaking from the hospitality industry’s point-of-view.
Hilton has been seeing the combination of occupancy and rates at an all-time high this festive season, with nearly 10 per cent year-on-year (YoY) increase in terms of RevPAR, or revenue per available room.
“Post-Covid, you are seeing a natural boom of people returning to experience-based travel,” Watts, and partly attributed the positive sentiment in the industry to improving infrastructure, like faster trains and newer airlines routes.
In other sectors as well, muted demand across industries is being offset with the soaring momentum during the festive season.
Online travel aggregator ixigo has witnessed record-breaking numbers in its flights and buses during the festive season at more than a 50% YoY rise for the Diwali period.
For realty, the housing market has seen a pick-up in activity, according to Anshuman Magazine, Chairman and CEO - India, South-East Asia, Middle East and Africa, CBRE.
Realty firms like Sriram Properties reported a muted YoY growth in their second quarter earnings yet emphasised a strong outlook for the second half of the financial year (FY) due to the festive season.
The Federation of Automobile Dealers Associations (FADA) said that this year’s festive period sales from October 3 to November 13 came in at about 4.3 million units, up from last year's 3.8 million units. Majors like Maruti Suzuki India reported their highest-ever retail sales with a 4% YoY growth, while Mahindra & Mahindra reported their highest monthly sales in October for the current fiscal.
Meanwhile, India's manufacturing sector growth was revitalised in October, after September saw it dipping to an 8-month low.
As per Shiprocket, e-commerce is all set to see a 23 per cent YoY rise in festive sales, as e-commerce firms like Amazon and Meesho launch round-the-clock holiday schemes.
Still, Kapil Makhija, Managing Director & CEO, Unicommerce eSolutions, cautioned, “While the festive season sales demonstrated a strong start, but beyond the sale period, the softness continues, similar to last year.”
Meanwhile, more and more Indians are experiencing foreign travel, Hilton’s Watts said. “While India domestic travel has always been a thing, more middle-class travellers are experiencing outbound destinations for the first time or even tier-I cities for the first time,” he said.
Today, Hilton has 29 hotels in India with 24 in the pipeline, and is looking to triple its footprint in India by 2027 with all of its growth being organic.
Watts explained in terms of revenue, “For APAC, 40 per cent of all revenue in the Hilton portfolio comes from food and beverage, making it a critical component for brand success in the region.”
At the same time, Watts observed that international geopolitical disturbances haven't disrupted the industry in Asia with the exception of US long-term flight routes disrupted through fly safe zones increasing travel time, and consequently costs.