The Indian hotel industry is on the verge of a striking rebound, with strong demand expected to fuel double-digit revenue growth in FY2024, as per a report published by ICRA Domestic leisure travel, as well as demand from meetings, incentives, conferences, and exhibitions (MICE) and business travel, are positioned to play a vital part in this rebound. Furthermore, the industry has benefited from the return of foreign visitor arrivals (FTAs) and the influence of events such as the G20 summit and the ICC World Cup 2023.
Revenue and occupancy forecasts According to ICRA’s analysis, pan-India premium hotel occupancy is expected to reach 70-72 percent in FY2024, after recovering to 68-70 percent in FY2023. Furthermore, average room rates (ARRs) for premium hotels are predicted to remain between INR 6,000 and 6,200 in FY2024. Although occupancy is expected to hit a decade high, revenue per available room (RevPAR) is expected to remain 20-25 percent lower than in FY2008.
Several reasons are influencing its revival. Infrastructure and air connectivity improvements, favorable demographics, and an increase in large-scale MICE events due to the development of new convention venues are fueling robust demand. According to the research, larger players will gain from both revenues and profit shares generated by hotel expansions through management contracts and operating leases.
