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Motilal Oswal Report
The hotel industry witnessed healthy performance in Q1 FY24, mainly led by a continued rise in average room rate. In this report, we present the current demand scenario and key insights based on Q1 FY24 results and the management commentaries of major hospitality players – Indian Hotels Company Ltd., Lemon Tree Hotels Ltd., Chalet Hotels Ltd., EIH Ltd., Oberoi Realty Ltd., Brigade Enterprises Ltd., and ITC Ltd.
As per HVS Anarock, the Industry revenue per available room in Q1 FY24 grew 15% YoY on the back of a strong ARR growth (up 18% YoY to Rs 6,900). Occupancy rate stood at ~63% (down 260 bp YoY) on the back of higher base.
The hospitality basket reported healthy financial performance as revenue/Ebitda grew ~16%/17% YoY, with EIH leading the pack (up 26%/56% YoY).
Within the basket, all the companies registered ARR growth (~9-38%) as compared to last year, with Chalet Hotels leading the pack at 38% YoY.
Lemon Tree/Indian Hotels standalone witnessed 510 bp/430 bp YoY growth in occupancies, with the rest witnessing flattish to negative change.
Going ahead, occupancy rate is likely to improve in the near term, led by favorable demand-supply dynamics and demand drivers such as the B20 and G20 Summit meetings, the ICC ODI Cricket World Cup, and the resumption of foreign inbound travel. ARR should continue to inch higher, thereby boosting RevPAR.
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