ICRA forecasts 9% revenue growth for hotel industry in FY25

Growth in hotel industry: According to a report by credit rating firm ICRA, hotel industry is poised to achieve a revenue growth of seven to nine per cent in financial year 2024–25. Despite a temporary slowdown during 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.

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

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

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

(with PTI inputs)