2 months ago
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India’s hotel industry is expected to clock revenue growth of 11-13% in the next fiscal after a strong 15-17% growth in the current fiscal, backed by steady domestic demand and ramp up in foreign traveller demand, Crisil Ratings wrote in a note. The strong demand dynamics along with modest new supply would keep the operating performance of the industry healthy over the near term, it added.
“The healthy operating performance will augur well for the industry profitability where the earnings before interest, taxes and depreciation (EBITDA) will continue the strong momentum over the current and the next fiscal,” the rating agency said.
“This, along with limited capital expenditure, will keep the credit profiles strong,” it added.
Anand Kulkarni, Director, CRISIL Ratings said, “The domestic travel demand, which remained a key driver this fiscal, will sustain next fiscal as well. This momentum will be supported by healthy economic activity which drives business demand and continuing leisure travel demand which reinvigorated post the pandemic.”
“While the demand will remain strong, the growth rate is expected to taper off next fiscal due to high base. Consequently, the average room rates (ARRs) are expected to grow 5-7% next fiscal against 10-12% this fiscal and the occupancy is expected to remain healthy at current levels of 73-74%,” he added.
On the other hand, the foreign tourist arrivals in India, despite a growth this fiscal, are estimated to remain 10% below pre-pandemic level and pick-up in the same is expected provide fillip to the hotel demand next fiscal, the rating agency said.
