According to a report by Icra Ltd., the Indian hotel industry will probably witness 13–15% revenue growth in FY24, despite anticipated demand effects from further Covid waves.
Domestic leisure travel, higher bookings from Meetings, Incentives, Conferences, and Exhibitions (MICE) events, business travel, and a small increase in international visitor arrivals have all contributed to the demand rebound that has been so strong over the previous year and is anticipated to continue in FY24. The sector might gain from occasions like the G20 summit and the ICC World Cup 2023.
Icra predicts that in FY24, premium hotel occupancy in India will range between 70-72%, with an average room cost of US$ 73.24-75.68 (Rs. 6,000-6,200). While markets like Chennai and Hyderabad benefited in FY23 from MICE (including weddings) and a rise in business travel, demand for leisure destinations has been robust since the third quarter of FY22. Mumbai and Delhi reported over 75% occupancy in FY23.
Further, the hotel supply pipeline is expected to grow at a three-year compounded annual growth rate (CAGR) of 3.5-4%, adding around 15,500 rooms to the pan-India premium hotel room inventory of 94,800 rooms across 12 major cities. This will facilitate an upcycle, as demand improves over medium term and supply lags.
