Growth in hotel industry: According to a report by credit rating firm ICRA, the hotel industry is poised to achieve a revenue growth of seven to nine per cent in the financial year 2024–25. Despite a temporary slowdown during the upcoming general elections, ICRA expects sustained domestic leisure travel and demand for meetings, incentives, conferences, and exhibitions (MICE) to be key drivers of this growth.

The report highlights the crucial contribution expected from spiritual tourism and Tier 2 cities to the overall demand in the next fiscal year. It also notes that pan-India hotel occupancy rates reached a ten-year high of 70 to 72 per cent in the current financial year, up from 68 to 70 per cent in 2022–23. 

In terms of average room rates (ARRs), ICRA projects an increase from around Rs 7,400 in the current fiscal year to Rs 8,000 in FY 2024–25. The report also mentions a positive outlook for the Indian hospitality industry, citing improvements in credit ratings.

While the industry has witnessed an uptick in demand leading to announcements of new supply and the commencement of deferred projects in the last 18–24 months, the report notes that supply is expected to lag behind demand. 

(with PTI inputs)