IT'S YESTERDAY ONCE more for India's hotel industry. Backed by a rebounding economy, the current fiscal would be one of the best years for the hotel industry, with average room rates (ARRs) poised to rise by 10-15% from a high base of last fiscal. While occupancy is likely to remain high at 68-73%, the industry's margins are also expected to improve sharply in FY24.
"In FY24, it is expected that the demand from business and leisure will continue to be stronger and foreign tourist arrivals are expected to recover to pre-pandemic levels.
Also, various events, including the Indian Premier League, G20 summit, ICC World Cup and continued demand from corporates, leisure travel, meetings incentives conferences and exhibitions (MICE) and weddings will ensure ARRs and occupancies reach new highs," Pushan Sharma, director-research at Crisil Market Intelligence and Analytics said.
"Meanwhile, players who had reduced their employee-to-room ratio by 20-30% between fiscals 2020 and 2022, have carried forward the cost rationalisation even post the revival in demand. This, along with improving ARRs and occupancy levels, is projected to sharply improve the industry's margins in fiscals 2023 and 2024," Sharma added.
This story is from the April 19, 2023 edition of Financial Express Mumbai.
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This story is from the April 19, 2023 edition of Financial Express Mumbai.
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