Indian Hospitality Industry Set for Record Highs

ICRA projects India's premium hotel RevPAR to reach a decade-high by March, driven by domestic tourism and increased occupancy. The hospitality industry's revenues may grow significantly in the coming years, with average room rates also seeing substantial rises. Foreign tourist arrivals remain below pre-Covid levels.

India's premium hotel market is poised for a record-setting year, with Revenue per Available Room (RevPAR) expected to hit a ten-year high, according to a report by rating agency ICRA. The RevPAR is forecasted to reach Rs 5,500-5,800 by the end of this fiscal year.

Fueled by sustained domestic tourism and robust demand from the MICE sector, including weddings and business travel, hotel revenues are projected to grow by 7-9% year-on-year in FY25, with a further increase anticipated in FY26. The average room rates are predicted to rise significantly, showcasing healthy growth across the sector.

Despite domestic travel driving current demand, foreign tourist arrivals have not yet returned to pre-pandemic levels. However, the prediction is bullish, with occupancy rates expected to improve and contribute to the industry's upward trajectory over the next 12 months.

(With inputs from agencies.)