Summary:

According to Axis Capital, India's hotel industry is set for long-term growth, with demand projected to expand at a 12% CAGR from FY24-27, outpacing supply growth at 9%. This favorable demandsupply dynamic, combined with key growth factors, ensures a sustained industry upcycle. After overcoming prior overcapacity, the sector now enjoys balanced supply growth. Limited branded hotel availability globally and a stronger focus on Tier-two cities present significant growth opportunities, particularly in luxury accommodations.

The report highlights key drivers of demand growth in the hotel industry. Leisure travel, which accounts for 46% of total demand, has steadily increased with rising incomes and affluent households. Business travel (31%) is recovering as corporate revenues and budgets grow. Rising wedding expenditures and global events are driving the MICE market's expansion, while improved infrastructure is boosting international tourism. Higher occupancy rates and ARR continue to benefit the industry, despite challenges such as seasonality and economic downturns.

Source: IBEF

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