ICRA estimates pan India Average Room Rates (ARR) to remain flat for 2015-16, nevertheless occupancy improvements of 6%-7% supports Revenue per available room (RevPAR) growth of 7%. Room inventory in the premium category is estimated to increase by 8% for 2015-16 as compared to 4% during 2014-15. With deferment in construction, supply addition would be lower than earlier estimates at ~7.7%-8% for 2016-17.
Foreign Tourist Arrivals (FTAs) slowed down to 4.4% during Calendar year 2015 (7.1% during 2014); the FTA segment continues to remain far below its true potential. Further, per capita dollar spend by tourists declined sharply in 2015 after remaining stagnant for three years. Given the muted global economic outlook, FTA growth for CY2016 is also expected to be subdued. Domestic travel, going by domestic airline Revenue Passenger Kilometre (RPKM) trends exhibited strong growth during the past 12 months indicating improving consumer confidence.
ICRA estimates the top line growth for the industry to be ~8% during 2015-16, with operating margins expanding by 100 – 150 bps. Growth would improve in 2016-17 to 9%-10% aided by pickup in occupancies and ARR traction in a few markets like Mumbai.
While improving consumer confidence has supported growth in occupancies, ARRs also appear to have bottomed out and was marginally down during YTD Dec-2015. Revenues for the industry sample grew by 7% during Q2, 2015-16 majorly due to occupancy driven RevPAR growth, while cost control measures bumped up operating margin by 250 bps to 8.8%.
Your email address will not be published. Required fields are marked *
Save my name, email, and website in this browser for the next time I comment.
Sign me up for the newsletter!
Notify me of follow-up comments by email.
Notify me of new posts by email.
Let’s unanimously go gaga over CROCS
Menswear Raaya inaugurates its new store by presenting occasional wear attires
Uber partners with DocsApp to provide free doctor consultations to driver-partners
Applied Ventures Recognizes Best-in-Class Start-Ups in India
Bunts Sangha’s S M Shetty International School and Junior College students visit Aarey Tribal Community
2014 The Global Indian New Network (TGINN)