Indian Hotels 21 November 2018 Fundamentals for the Indian hospitality industry are turning favorable, with demand growth (10-12%) likely to outpace supply growth (5% over FY18-23). The robust level of new inventory (room supply growth of 10.6% v/s room demand growth of 10.2% over FY08-18) was keeping hotel room rates in check (industry ARRs declined at a compounded annual rate of ~3% over FY08-18). Such favorable demand- supply dynamics were last observed in the previous upcycle, when occupancy jumped from 65% to 69-72%. Strong presence in the high demand, high-occupancy micro markets of Mumbai, NCR, Bangalore and Goa, places IHIN well to cater to rapid growth in the domestic market as it has 8-14% market share across regions. According to our calculations, Mumbai, NCR, Goa and Bangalore constitute ~55% of IHINs domestic revenue and ~51% of domestic EBITDA.