Strong demand in H2 FY24 to contribute to double-digit revenue growth for hotel industry: ICRA
ICRA expects the strong demand in the second half of this fiscal year to contribute to double digit revenue growth for the hospitality industry in fiscal year 2024.
«ICRA expects the Indian hotel industry to report double-digit revenue growth in FY2024, supported by the sustenance of domestic leisure travel, demand from meetings, incentives, conferences, and exhibitions (MICE), and business travel, along with an increase in foreign tourist arrivals (FTAs). The industry has also benefited from the G20 summit and the ongoing ICC World Cup 2023,» the company said in a statement.
ICRA estimates pan-India premium hotel occupancy at 70-72% in fiscal year 2024, after recovering to 68-70% in FY2023. Pan-India premium hotel average room rates (ARRs) are expected to be at Rs 6,000-6,200 in FY2024.
While the occupancy is expected to be at decadal highs, the revenue per available room (RevPAR) is expected to remain at a 20-25% discount to the FY2008 peak.
ICRA said the medium-term demand outlook also remains healthy, supported by a confluence of factors including improvement in infrastructure and air connectivity, favourable demographics, and anticipated growth in large-scale MICE events with the opening of multiple new convention centres in the last few years. The healthy demand amid relatively lower supply would lead to higher average room rates, the company said.
Vinutaa S, vice president and sector head of corporate ratings at ICRA said the demand is expected to remain strong across markets in FY2024 as consumer sentiments continue to be healthy and corporate performance is stable.
