(This story originally appeared in on Oct 19, 2017)

The domestic hospitality sector has staged a smart recovery from the slowdown of recent past. Hotels have not only recorded over 65% occupancy in 2016-17 for the first time since 2007, average room rates (ARRs) are now the highest in last four years. The overall average (across segments) ARRs was Rs 5,658 in 2016-17, arresting the constant fall in rates seen since 2010-11, according to a report by hotel consultancy firm HVS, which was released earlier this month.The revival continues on a strong note in the current financial year, too. Tariffs are now likely to rise for the next four to five years as new supply is ebbing. HVS said the demand-supply equation today and in the next 48-60 months is more than likely to present an opportunity for substantial average rate enhancement.Dipak Haksar, chief executive of ITC Hotels & WelcomHotels, said, "The competitive marketplace is displaying signs of extreme dynamism and the future looks positive due to increasing demand pattern. The industry is certainly poised to begin the next up cycle and we will be able to see this impact in coming months, both in terms of growth in volume and room yield."Chinmai Sharma, chief revenue officer of Taj Hotels Palaces Resorts Safaris, said India is currently one of the world's fastest growing major business travel markets. "The overall business sentiment and international arrivals into India have stayed healthy, resulting in corporate and transient business showing growth. With room demand outpacing new supply growth in all key markets, occupancy rates have shown good improvement over last year. This has also given all hoteliers more pricing confidence, especially in the leisure portfolio, including palaces," Sharma said.HVS' report on "Hotels in India — Trends and Opportunities (2017)" said, "On a nationwide basis, new branded and organised supply (in 2016-17) grew 5.9% over the preceding year. Overall demand increased by 9.6% in the same period. Occupancy of 65.6% was higher than 63.3% in 2015-16. Indian hospitality sector has woken up after a longish nap and, it is now time to set the cash registers ringing."The fiscal 2016-17 saw the existing rooms supply grow 6.8% over the previous year to 119,219 rooms. "Kolkata saw the highest growth in supply (18.4%) last year... Goa and Chennai recorded the second and third-highest growth in supply at 14.8% and 9.8%, respectively. In absolute terms, New Delhi continues to have the largest base of hotel rooms (14,296), followed by Mumbai (including Navi Mumbai) and Bengaluru, with 13,494 and 11,995 rooms, respectively. NOIDA (including Greater NOIDA) maintains its position as the smallest major hotel market in India with 1,422 rooms despite an increase of 7.6% in supply in 2016/17," the report says.