Air Pollution Boosts Demand for Hotels, Second Homes in Hills

Updated on: 20 November 2024 6:21 pm

Tired and scared of ongoing gray haze in Delhi, families have started packing their bags and flocking to hills for fresh air. Some are embracing this opportunity to have a rejuvenating vacation, while others are leveraging the flexibility of the “work from anywhere” model. This led to a surge in demand for hotels and second homes nestled in Himachal’s slopes and Uttarakhand’s lush valleys.

Hotel owners and builders in cities like Kasauli Hills, and Rishikesh claimed that demand for their properties witnessed an uptick by around 20 per cent due to rising air pollution in the national capital region. As per CPCB data at 10 am today, Delhi’s AQI level was in ‘severe’ category --- stood at 427, making air unbreathable for the city people.

“Smog during winters and poor air quality throughout the year have become persistent challenges in metros. Hill stations like Kasauli, due to their proximity to Delhi and Chandigarh, have emerged as a preferred escape,” Ambika Saxena, Director of Corporate Communications at Bayside Corporations (BCS) told Outlook Business.

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While Kasauli hotels and home stays have witnessed around 40% of year-on-year demand surge, Saxena said this number further increases by an additional 15-20 per cent during the peak smog season which usually begins in October and continues till November end.

Terra Grande by Eldeco Group, which is developing its properties in Rishikesh and Kasauli Hills, also reflects the same trend in the hotel bookings. As pollution levels in Delhi NCR continue to worsen, the demand for hill station second homes has seen a significant rise of 15-20 per cent these days, said founder Amar Kapoor.

This trend shows a growing shift in mindset, where people are now looking to invest in cleaner and pollution-free spaces as a future-proof investment, driven by the rising concern of urban air quality, he said, adding that the group sees a bump in the number of bookings every year during the pollution season.

Another hospitality player, Elementa by Sushma Group which offers luxury apartments in Kasauli Hills, also witnessed around 35 per cent spike in bookings due to ongoing smog in the national capital.

“The rise in pollution-driven travel is more than a seasonal trend; it signals a broader, long-term shift in the hospitality and real estate sectors,” said Prateek Mittal, Executive Director of the group.

Crisis Sparks Opportunity

The pollution-driven travel could lead to a long-term shift in the demand for second homes, the concept which started during Covid-19 pandemic when people looked for safe and less crowded environment. This shift in consumers’ behaviour can be attributed to the rising awareness about health and wellness.

“As urban pollution concerns grow, more buyers may seek second homes in hill stations as a healthy and peaceful alternative. This shift could drive sustained demand for such properties, with an increasing focus on developing high-quality second homes in pollution-free, natural environments,” Kapoor told us.

Saxena stated that hill stations have always been a lucrative market for hospitality players. With pollution becoming a persistent issue in metro cities, owning a home in the hills is becoming a practical solution not just for a healthier lifestyle but also for financial returns, he added.

Does the price of second homes also rise during pollution period? This is an obvious question which comes to customers’ minds because as per demand and supply rule, price rises when there is a greater demand. However, experts present the ground reality which looks completely opposite.

“While a seasonal spike in demand does not significantly impact real estate pricing, it does influence revenue models. Serviced apartments, second homes, and resorts in these regions provide owners an opportunity to earn 10-15% more through rental income, particularly during high-demand periods,” he said.

Travelling due to air pollution has become a reminder of the critical need of effective measures to curb air pollution in the city. Though the Delhi government has implemented GRAP-IV measures to bring down the air quality level, the persistent smog and hazardous AQI indicates that more comprehensive measures are necessary.