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Indian hotel industry may post 3%-4% revenue growth for H1, 2015-16 :ICRA

Research and consulting organisation ICRA has said it expects pan India occupancies in India's hotels to improve by 2%-4% during 2015-16, leading to RevPAR growth of 3%-5%, even as supply growth curbs Average Room Rates (ARR) expansion.

Room inventory in the country is expected to grow by 12% during 2015-16, as compared to 4% during 2014-15, ICRA said in its research on Indian Hotel Industry. Notwithstanding delays in commissioning of under construction supply during 2009-2014, supply additions (in the premium segment) still continue to trickle in from projects announced during the pre 2009 industry heydays, says ICRA. Domestic travel, going by domestic Revenue Passenger Kilometre (RPKM) trends exhibited strong growth during the past 12 months.

However, weak corporate results can impact discretionary travel. Travel for business can be curtailed in view of technological advancement which supports highly interactive meetings in virtual spaces. In ICRA's view, pickup in consumer confidence, coupled with improved connectivity from newer airlines and higher travel is expected to revive demand for hotels soon.

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