Mumbai: Indian hotel industry revenue is expected to grow by 9-11 percent in 2015-16 -- after a subdued growth rate of 5-8 percent in the current fiscal, rating agency ICRA said in a report.
The growth is expected to strengthen in 2015-16 mainly on account of a modest increase in occupancy and small traction in rates, ICRA said.
The margins are expected to remain largely flat for the current fiscal 2014-15, while a moderate albeit sub-par expansion is expected in the next financial year.
While occupancies are showing signs of improvement, this appears to be driven by few pockets like Mumbai, where occupancies grew by 15 percent year-to-date in December 2014 supported by traffic for large conferences and weddings.
Bengaluru has also exhibited some stabilisation with incremental supply being slowly absorbed. However, the newer properties launched during 2012-14 continue to struggle with weak revenue, the ICRA report said.
The National Capital Region (NCR) is exhibiting wide variation in performance across Delhi, Noida and Gurgaon, with Delhi showing marginal growth while trends in the Delhi Aerocity area and Gurgaon remained weak.
The country has around 29,000 premium rooms under development, which would be launched over the next six years.
It further added that the next supply bump will hit the market in 2016 across Bengaluru, Mumbai, Kolkata and Noida with over 6,500 rooms.
Markets like Pune and Gurgaon will also see sizable room additions, it revealed.
Unless demand keeps pace, the widening supply-demand gap in these cities will impact rate integrity over the next two years, the report said.
