Indian hotel industry revenue expected to grow 7-9% in FY25: ICRA

The Indian hotel industry is poised for a 7-9% revenue growth in FY2025, driven by strong domestic leisure travel demand and events like weddings and business travel. ICRA expects occupancy to hit decadal highs, with tier-II cities and spiritual tourism contributing significantly. While domestic tourism remains a key driver, foreign tourist arrivals have yet to rebound fully post-Covid, contingent on the global economic climate.

ICRA foresees premium hotel occupancy peaking at around 70-72% in FY2024 and FY2025, with average room rates climbing to US$ 94.06 – 96.47(Rs. 7,800-8,000) in FY2025. Despite some outliers exceeding pre-Covid levels, the industry is expected to reach the 2008 peak by FY2025. The medium-term outlook remains positive, supported by infrastructure enhancements, air connectivity improvements, and the growth of large-scale MICE events with new convention centers opening in recent years.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.