Wednesday, August 21, 2024 Indian Hotels Company Limited reports a strong Q1 for Tata Group’s Delhi-NCR hotels, achieving 82% occupancy and boosting revenue to Rs 8,200 per room. The occupancy rate at Tata group-promoted Indian Hotels Company (IHCL) properties in the Delhi-NCR region rose by 2% to reach 82% in Q1 FY25, while the revenue per available room saw a 10% increase, hitting Rs 8,200. The slower pace of new hotel openings and strong domestic demand are expected to maintain high room rates during the upcoming travel seasons, as branded hotel room supply in India remains significantly underdeveloped.
According to data from hospitality consultancy Horwath HTL, the period from April to June saw the addition of 2,900 rooms, increasing the total supply by 1.4% to 191,000 rooms across India. Among these, the top eight cities, including Delhi, Mumbai, Bengaluru, and Chennai, experienced only a 0.
6% growth. However, extreme heatwaves and reduced MICE (meetings, incentives, conferences, and exhibitions) activity due to general elections have led to slower growth during this period, according to industry experts. This trend is expected to reverse later in the year.
Holiday planners have observed a significant reduction in the time taken by travelers to organize leisure trips, now down to 3-5 days from the previous 3-4 weeks, primarily due to long weekends. Demand for the upcoming travel season, typically beginning in December, is on the rise. During a recent earnings call, Ankur Dalwani, Executive Vice President and CFO of IHCL, noted, “The actual increase in supply during Q1 has been muted, with only a 1.
4% rise. The supply is not expected to catch up with demand in the next 2 to 3 years.” By the end of FY27, approximately 50,000 branded rooms are projected to enter the market, representing a compounded annual growth rate (CAGR) of 8% from the 191,000 rooms recorded at the end of FY24.
However, this growth rate will likely fall short of the anticipated demand increase, which is expected to grow at a CAGR of 10%, according to Hotelivate. In India, the penetration of branded rooms stands at just 0.1 per 1,000 people, compared to 16.
3 in the US and 3.2 in China..
