Indian hotel industry revenue expected to grow 7-9 pc in FY25: ICRA
Indian hotel industry is expected to report a 7-9 per cent revenue growth in FY2025 with occupancy likely to be at decadal highs, ratings agency ICRA said on Tuesday. Sustenance of domestic leisure travel, demand from meetings, incentives, conferences, and exhibitions (MICE), including weddings and business travel despite a temporary lull during the election period are likely to drive demand in FY2025, ICRA said in a statement.
Spiritual tourism and tier-II cities are also expected to contribute meaningfully in FY2025, it added.
ICRA said domestic tourism has been the prime demand driver in FY2024 and is likely to remain so in the near-term. Foreign Tourist Arrivals (FTA) are yet to recover to pre-Covid levels and the improvement would depend on the global macroeconomic environment.
«Demand is expected to remain strong across markets in FY2025, as consumer sentiments continue to be healthy and corporate performance is stable,» ICRA Ltd Vice President and Sector Head Corporate Ratings Vinutaa S said.
She further said domestic tourism would be the prime driver, with FTA improvement depending on the global macroeconomic environment.
ICRA said it «estimates pan-India premium hotel occupancy at decadal highs of (around) 70-72 per cent in FY2024 and FY2025, after recovering to 68-70 per cent in FY2023».
Pan-India premium hotel average room rates (ARRs) are expected to go up to around Rs 7,200-7,400 in FY2024 and rise further to Rs 7,800-8,000 in FY2025, it added.
«The RevPAR (revenue per available room) is expected
