Hotels, Restaurants & Tourism share price target

The hotel industry kicked off FY24 with a strong performance in the April-June quarter, riding on high demand that has continued into the new financial year. As supply trails demand, the market dynamics are allowing hotels to raise room rates.

According to HVS Anarock, Jul’23 was another strong month with hotel industry RevPAR of INR3,965 being 16% above Jul’19 (pre-Covid) levels and 11% above Jul’22 levels. While Q2FY24 (Jul-Sep’23) is seasonally the weakest quarter owing to monsoon impact, hotels continue to follow a strategy of keeping rates at least 8-10% higher than previous year levels.

According to HVS Anarock, Jun’23 was another strong month with hotel industry RevPAR of INR4,288 being 27% above Jun’19 (pre-Covid) levels and 13% above Jun’22 levels. For Q1FY24 overall (Apr-Jun’23), industry RevPAR is up 14% YoY with ARRs up 17% YoY and occupancies lower by 200bps YoY.

As per HVS Anarock, May’23 was another strong month with hotel industry RevPAR of Rs4,216 being 24% above May’19 (pre-Covid) levels and 13% above May’22 levels (Apr’23 RevPAR of Rs4,536 was 19% above Apr’22 levels). For May’23, industry ARR of Rs6,800 was up 16% YoY, while occupancy declined by 200bps YoY to 62%.

Indians have been bitten by the travel bug. ‘Netflix and chill’ is out, ‘going on a vacation’ is in. The hotels sector has seen a resurgence over the past year, fueled by robust demand for leisure travel, corporate trips, and events. The momentum seen after travel restrictions were lifted in Q1FY23 has continued, with occupancy rates surpassing pre Covid levels across all four key hotels under focus.

As per HVS Anarock, Apr’23 was another strong month with hotel industry RevPAR of Rs4,536 being 23% above Apr’19 (pre-Covid) levels and 19% above Apr’22 levelsn (YoY basis). For Apr’23, industry ARR of Rs7,200 was up 20% YoY while occupancy remained flat YoY at 63%.

As per HVS Anarock, Mar’23 was another strong month with hotel industry RevPAR of ~Rs4,850 being 21% above Mar’19 (pre-Covid) levels. In Mar’23, Mumbai continued to clock the highest occupancy rate among cities at 77% followed by New Delhi at 75% while in ARR terms, Mumbai clocked over Rs11,000 followed by Goa at Rs10,000 and New Delhi at over Rs9,500.

As per HVS Anarock, Feb’23 was another strong month with hotel industry RevPAR of ~Rs5,900 being 13% above Feb’19 (pre-Covid) levels. A key highlight for Feb’23 was that pan-India hotel occupancy crossed 70%, the first time since the onset of Covid in Feb/Mar’20. The Mumbai market saw Feb’23 ARRs crossing the Rs12,000 mark, while Goa and New Delhi also recorded Feb’23 ARRs in excess of Rs10,000.