During the 2008 upcycle, the industry reported occupancies of 69% with the average room rates at around Rs 8200. As per ICRA’s projections, the industry should report occupancies of 70-72% in fiscal year 2025 with average room rates hovering around Rs 7800-8000.
ICRA estimates pan India premium hotel revenue per available room to be at Rs 5000-5300 in financial year 2024 and Rs 5500-5800 in financial year 2025 against Rs 4400-4600 in financial year 2023.
ICRA said the demand is expected to remain strong in this fiscal, aided by a confluence of factors such as a healthy demand for leisure travel and a preference for brands, destination weddings, strong corporate MICE demand, and religious tourism.
The medium term outlook also remains healthy, ICRA said, aided by the government’s focus on infrastructure and connectivity development, India’s economic progress, favourable demographics and spending patterns favouring experiences and tourism.
The gateway cities of Mumbai, Delhi and Gurugram are likely to top the occupancy charts this fiscal with occupancy rates hovering between 78-80% for Delhi; 74-76% for Gurugram; and 82-84% for Mumbai respectively. ICRA said average room rates would continue to inch towards the 2008 peak in most markets in this financial year. The healthy average room rates in premium hotels would continue to result in a spill over of demand to mid scale hotels, ICRA said.
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