This fiscal, Indian hotel industry revenue will grow 23% more than pre-COVID period: Report 

"Leisure travel had gained traction post the Delta wave last fiscal, while business travel has started picking up steadily after a much milder Omicron wave in January 2022. This has been fuelling demand in the MICE (meetings, incentives, conventions and events) segment," Crisil Ratings Senior Director Mohit Makhija said.

Crisil Ratings believes that improvement in international business travel in the second half of this fiscal will strengthen the industry’s performance, he said.

"Occupancy will rise to 73 percent this fiscal (68 percent in fiscal 2020), while average room rate (ARR) should increase 8-10 percent," he added.

The report further said that the gap between demand and supply will aid the improvement in ARR.

Developers had held back on capex amid the pandemic-induced uncertainties, and while the sharp rebound in demand may spur an increase in capex, supply will take a while to catch up because of the long gestation period for setting up a greenfield hotel that will favour existing hotels, it added.

Meanwhile, organised players are increasing their footprint in an asset-light way, the report said.

They are increasing capacity by entering into hotel management contracts for existing standalone properties, which will limit their upfront capital costs and keep leverage in control.