The Indian hotel industry is expected to register a revenue growth of seven to nine per cent in the next financial year 2024-25, according to a report by credit rating firm ICRA. 

ICRA said that sustenance of domestic leisure travel, demand for meetings, incentives, conferences, and exhibitions (MICE) are the factors which will drive demand in the next financial year, despite a temporary lull during the ensuing general elections. 

The research firm said that spiritual tourism and Tier 2 cities are expected to contribute meaningfully to the overall demand in the next fiscal. 

According to ICRA, estimates for pan-India hotel occupancy reached a decadal high of 70 per cent to 72 per cent in the current financial year and next fiscal, as compared to 68 per cent to 70 per cent in 2022-23. 

Pan-India, average room rates (ARRs) are expected to be around Rs 7,200 to Rs 7,400 in the current fiscal, which is likely to rise further to Rs 7,800 to Rs 8,000 in the next financial year. 

ICRA holds a positive outlook for the Indian hospitality industry with improvements in credit ratings, the report said. 

The demand uptick resulted in a pickup in supply announcements and commencement of deferred projects in the last 18 to 24 months, however, adding that supply would lag demand.