Hotel Sector Check - Stellar Start To Festive Season Along Expected Lines: ICICI Securities

ICICI Securities Report

According to HVS Anarock, October 2023 was a stellar month for the hotel industry; we note industry revenue per available room of Rs 4,852 was 27% above October 2022 levels with average room rates being 15-17% higher YoY while occupancies were also up by 600 basis points YoY at 62-64%.

Along expected lines, demand was bolstered by the Men’s cricket ODI World Cup particularly in cities hosting matches with ARRs growing between 15-33% YoY in those cities.

Going forward, for the remainder of FY24E (November 2023-March 2024), the focus will now be on demand drivers such as the wedding season, meetings, Incentives, Conferences and Exhibitions and international tourist arrivals recovering to pre-Covid levels.

Our channel checks for forward hotel rates for the Nov-23-Jan-24 period indicate that quoted rates are at least 10% higher than the previous year.

Reiterate 'Buy' ratings on Indian Hotels Ltd., Lemon Tree Hotels Ltd. and Chalet Hotels Ltd.

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