On the strength of a recovering economy, The Financial Express (FE) projected that the Indian hotel industry is poised to have one of its finest years this fiscal.
A 10 to 15% increase in average room rates (ARRs) from an already high base from the previous fiscal year, along with a maintained high occupancy of 68 to 73 percent in FY24, are predicted to have a significant positive impact on industry profits.
According to a Crisil analysis, luxury hotels’ ARR is predicted to have climbed by 24 to 26% in FY23, reaching a decade-high of Rs 7,500 to 10,000 after reporting a jump of 13% in FY22.
The research states that the occupancy rate, which was at 50% in FY22, is predicted to have risen from 67 to 72% in FY23.
The ARR in FY21 had decreased to 20–25% for the year as a result of the pandemic, with a 31% occupancy rate.
According to the FE article, which cited Pushan Sharma, director of research at Crisil Market Intelligence and Analytics, both business and leisure demand will continue to grow, and international visitor numbers are anticipated to return to pre-pandemic levels.
ARRs and occupancy rates will increase because of the Indian Premier League, the G20 summit, the ICC World Cup, and ongoing corporate demand for leisure travel, MICE (meetings, incentives, conferences, and exhibits), weddings, and meetings.
Despite the fact that business in the metros was not particularly strong, particularly for business hotels, Param Kannampilly, chairman and MD of Concept Hospitality and The Fern Hotels & Resorts, told FE that the hospitality industry performed quite well during the previous financial year.
Overall, the situation is positive, according to Kannampilly, who is optimistic that the sector will brighten up and the growth will extend beyond the luxury market in the next fiscal year.
This development was attributed to more accessible travel by Rajiv Kapoor, general manager of the upscale Fairmont Jaipur. Given the increased accessibility of travel, he commented as such. The previous two years have seen an improvement in road and air connections, as well as a transition in the hotel industry from affordable to luxury accommodations. This trend is expected to continue in the years to come.
The article also cited Vinutaa S., vice president and sector head (Corporate Ratings) at ICRA, who stated that the pan-India premium hotel business occupancy is anticipated to be between 70 and 72 percent in FY24 after rebounding to between 68 and 70 percent in FY23.
