In the current increasingly multi-polar world, countries with the biggest economies are facing uncertainty due to changing dynamics and various conflicts of interest within geopolitical, economic, energy, and technological landscapes. As a result, existing alliances cannot be taken for granted. Since every country is looking to strengthen its economy, minimise its reliance on other countries, and reduce vulnerability to external factors, countries must continually innovate and develop.
The global landscape this year has been challenging, but India’s ability to adapt and thrive has reinforced its position as a key player on the world stage. 2024 has also been a year of continuing growth for India across multiple parameters.
As we close out this year, we reflect on India’s significant milestones and accomplishments. In the year while recognising challenges that still need to be overcome We also look at the power of customer segmentation as a strategic tool for acquisition and retention. As consumers prepare to indulge in the end of year festivities, it feels appropriate to showcase our newest barware brand, Crystalex.
With 2025 fast approaching, we wish you a very happy new year. We are grateful for your continued support and look forward to connecting with you in the New Year. As always,
As we close the final edition of 2024, we look forward to the promise and possibilities of 2025. India’s growth story continues to evolve, and with it, the hospitality industry continues to innovate, delight, and cater to an ever-changing clientele. We thank you for for being a part of our journey and wish you a prosperous and fulfilling New Year ahead!
We remain keen to hear your thoughts and suggestions, so do connect with us at contact@seebagroup.com, visit our website www.thinkitchen.in or drop us a line on our social media pages under the handle @thinKitchen.
Thank you. Here’s to a successful 2025.
2024 in Review: India’s Triumphs and Challenges
2024 has been a year of both promise and challenges for India, marked by consistent growth momentum which has captured global attention.
India’s Role in Global Affairs
India’s diplomatic and geopolitical influence continued to grow in 2024. As tensions between major global powers heightened, India positioned itself as a neutral force, advocating for peace and cooperation. India's relationship with the United States, Europe and Japan is strong. At the same time, is seen as the natural leader of the global South as was evident n its chairing of G20 in 2023 and its proactive engagement in multilateral forums, such as the United Nations and the Shanghai Cooperation Organization (SCO.)
The 2024 Lok Sabha elections in India not only redefined the domestic political landscape but also strengthened India's position in global politics. This vibrant display of democracy strengthens India's soft power, enhancing its appeal and influence in international forums like the United Nations, G20, and BRICS. The successful conduct of elections also bolsters India's argument for a permanent seat on the UN Security Council, showcasing its commitment to democratic principles.
Economic Growth
India’s economy demonstrated remarkable strength in 2024, World Bank’s India Development Update, the country’s GDP is projected to grow at a robust 7% in FY 2024-25, underscoring its position as the fastest-growing major economy in the world. The growth is driven by robust domestic consumption, a booming digital economy, and a steady recovery in manufacturing and services. The government’s continued push for infrastructure development, digital transformation, and ease of doing business has helped fuel investment across sectors. Despite challenges like foreign investor outflows and global economic headwinds, India is projected to sustain its growth trajectory, with aspirations to achieve a $7 trillion economy by 2030 or becoming the world’s third-largest, surpassing Germany and Japan.
The Indian stock markets also saw significant milestones and performance this year, with the Sensex crossing the 85,000 mark and the Nifty reaching new heights. India’s transition from a cash dominant economy to a digital one in less than a decade has been remarkable with the United Payments Interface (UPI) processing 16.58 billion financial transactions in the single month of Oct’24.
India’s on-going Digital transformation
Strategic initiatives such as Digital India have played out in 2024. UPI’s growth from 92 crore transactions in FY18 to a staggering 13,116 crore transactions in FY24 highlights the widespread adoption of digital payments boosted by expansion of 5G networks. This success has redefined convenience and positioned India as a global leader in digital finance.
Over 35.6 crore Ayushman Cards have been issued under the Ayushman Bharat scheme, granting access to healthcare for many. Furthermore, more than 9 crore FASTags have been issued, which is almost equivalent to the number of vehicles manufactured worldwide in 2023, facilitating smooth travel across the nation’s highways. Such milestones highlight the comprehensive nature of India’s digital transformation, touching every facet of life and fostering sustainable economic advancement.
Indian Hospitality Landscape
FY 24 saw some record-breaking growth and CY24 has demonstrated further growth over the previous fiscal on a blended, nationwide basis. The ongoing winter months are shaping up to be the peak period for weddings. This surge not only boosts banquet bookings but also translates into a significant increase in room occupancy, creating a vibrant season for the hospitality sector. Winter is also a pivotal period for corporate and business travel which are both expected to remain strong.
YTD October 2024 saw strong momentum in branded hotel signings, with 33,407 keys signed across 333 properties, representing a robust 45% year-on-year growth in keys signed. Similarly, 8,073 keys across 119 properties opened by YTD October 2024, with majority of the openings concentrated in Tier 3&4 markets.
Sustainability Indicators
India has made significant strides in its economic growth; however, challenges such as poverty and inequality persist, in addition to societal challenges like gender inequality and environmental issues like air pollution and deforestation, which have led it to rank 23rdglobally in the Sustainable Trade Index 2024.
On the positive side, the WWF’s 2024 Living Planet Report highlights India’s food practices as a model of sustainability, drawing focus to the traditional Indian diet which is largely plant-based, and relies on grains, pulses, lentils, and vegetables rather than resource-intensive animal products, using fewer natural resources and emitting fewer greenhouse gases,, positioning the nation as a global example for others to follow.
Additionally in 2024, India reached a significant milestone in its renewable energy journey, with the country's total renewable energy capacity crossing the 200 GW aligning with the country's ambitious renewable energy target of achieving 500 GW from non-fossil sources by 2030.
Challenges
India’s growth is tied to broader global trends which are presently marred by sluggish growth, a delayed synchronous recovery in the West, slowing global trade and supply chain disruptions due to intensifying geopolitical uncertainties.
Sustained rural consumption is also important and it remains contingent on the purchasing power of rural India, which, in turn, will depend on job creation in the economy, ensuring a steady household income.
India continues to face challenges related to social inequality and will need more formal and quality jobs to ensure better income distribution as it becomes a US$5 trillion economy The country ranks poorly on several social development indices, including health, education, and poverty alleviation and needs focused government policies and investments in human capital, healthcare, and education to ensure inclusive growth.
Additionally over the next five years, rising raw material costs and intense competition will be significant headwinds that the industry will grapple with. Global supply chain disruptions could create additional turbulence.
Outlook for 2025
India’s GDP is expected to keep growing strongly in the long term, with a slightly lowered foc The Indian economy is likely to be relatively insulated against global shocks over the coming year. India’s equities are likely to perform strongly in the medium term, according to a separate report from Goldman Sachs Research.
Growth is expected to be driven by Tier 2 and Tier 3 Cities as they develop economically, and purchasing power increases, leading to a rise in demand. Overall the industry is well-positioned for growth, thanks to rising disposable incomes, urbanization, and changing consumer lifestyles.
The outlook for hospitality in 2025 also remains positive. According to a Hotelivate report, as reported in media, demand is expected to grow at a 10.8 per cent CAGR annually, while overall supply is anticipated to rise by 8 per cent. By 2027, the number of hotel rooms is projected to reach 241,000, up from the current 188,000. From 2024 to 2027, an estimated 18,000 rooms per year will be added.
Thus, with the growth momentum seen in 2024, despite lurking challenges, there is reason to look forward to 2025 with optimism.
Guest Segmentation: A strategic tool
In the fiercely competitive Indian hospitality market, guest segmentation has emerged as a powerful tool to boost revenue, enhance guest experiences, and secure loyalty. Guest segmentation is a marketing strategy that categorizes customers based on shared characteristics like demographics, psychographics, spending patterns, and digital behaviors. Unlike traditional methods that may simply separate leisure vs. business travelers, modern segmentation dives deeper, using data analytics to understand the nuanced needs and behaviors of guests. This approach allows hotels to tailor their offerings to different customer groups, driving more personalized experiences and, consequently, higher revenue.
Why It Matters
A 2023 report by the Indian Association of Hotels found that personalized guest experiences can increase repeat bookings by up to 40%. Additionally, 65% of travelers in India prefer hotels that cater to specific needs, whether those needs involve eco-conscious amenities, wellness-focused stays, or family-friendly offerings. These insights show the growing importance of segmenting guest bases beyond simple demographic criteria.
For example, luxury hotels are tapping into the rapidly growing wellness tourism trend, which has grown by 30% annually in India. By offering bespoke spa packages and curated wellness retreats, these hotels cater to the specific interests of health-conscious travelers. Meanwhile, mid-range hotel chains are focusing on the needs of Gen Z travelers, who are more likely to value digital check-ins, co-working spaces, and Instagram-worthy designs.
The Revenue Impact
The benefits of guest segmentation are not just theoretical but measurable. A Bain & Company study revealed that hotels with robust segmentation strategies see a 20-25% increase in ancillary revenue, thanks to upselling and cross-selling opportunities that are directly aligned with guest preferences. These personalized strategies lead to increased guest satisfaction and a higher likelihood of repeat business, contributing to both short-term and long-term revenue growth.
Segmentation as a strategic tool
Guest segmentation is not static. The hospitality landscape is evolving, and so too are the guest segments driving growth. Hence segmentation is a strategic imperative for hotels looking to stay competitive. By investing in advanced analytics and CRM systems, hotels can better understand and anticipate their guests' needs. This leads to optimized pricing strategies, hyper-personalized experiences, and ultimately, improved guest satisfaction and loyalty.
Action Points:
Is your hotel leveraging guest data effectively to segment and deliver tailored experiences? The time to act is now.
Understanding not just who the guests are, but why they travel and what they truly desire from their stay. The question isn’t whether to adopt guest segmentation, it’s how quickly and effectively it can be implemented to gain a competitive edge.
By making segmentation a priority, Indian hotels can create meaningful and lasting relationships with their guests, ultimately driving business growth.