Hotels Gain on Travel Boom in India

31.10.2023 - 11:05 / skift.com / Peden Doma Bhutia / Air India

Boosted by the travel boom, the Indian hotel industry is set to report double-digit revenue growth in fiscal 2024, as projected by ratings agency ICRA.

Optimistic Outlook for Hotel Occupancy: ICRA estimates premium hotel occupancy across India to reach a decade high at 70-72% in the fiscal year, after recovering to 68-70% in fiscal 2023. This optimistic outlook is underpinned by robust demand, relatively limited supply, and an anticipated increase in average room rates (ARRs), with ARRs for premium hotels anticipated to fall within the range of INR 6,000-6,200.

What’s Driving This? The medium-term demand prospects remain promising, driven by enhancements in infrastructure, air connectivity, favorable demographics, and the expected growth of large-scale meetings, incentives, conferences, and events, particularly with the opening of multiple new convention centers in recent years.

Larger hotel chains stand to benefit from revenue-sharing arrangements and profits derived from hotel expansions through management contracts and operating leases.

Asset-Light Expansions: The staff-to-room ratio remains approximately 15-20% lower than pre-pandemic levels. Asset-light expansions have proven margin-enhancing for major hotel chains. However, there may be some moderation in margins from the levels seen in fiscal year 2023 as hotels undertake renovation and maintenance activities, albeit significantly higher than pre-pandemic levels.

El Salvador has introduced a fee of nearly $1,130 (including $130 tax) for Indian travelers and individuals from over 50 African nations.

Why? The fee requirement was recently announced by El Salvador’s port authority as response to the growing challenges of illegal migration faced by the U.S. Reports indicate that many migrants pass through Central America to enter U.S.

The official statement from El Salvador’s port authority outlined that airlines must now daily inform Salvadoran authorities of passengers arriving from the list of 57 countries in Africa and India.

Major carriers like Avianca, which frequently use El Salvador’s airport as a hub, have begun notifying travelers from these countries about the mandatory fee, which must be paid before boarding flights bound for El Salvador.

The revenue generated from this fee would be directed towards improving the infrastructure of El Salvador’s primary international airport, as stated by the port authority.

India has now resumed some visa services for Canadians, the Indian High Commission in Ottawa announced recently.

Announcement: “After a considered review of the security situation that takes into account some of the recent Canadian measures in this regard, it has been decided to resume visa services,” a statement from the Indian High