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ICICI Securities Report
According to HVS Anarock, March 2024 was another strong month for hotel industry; we note industry revenue per available room of Rs 5,248 was 10% above March-23 levels with average room rates being 8% higher YoY while occupancies were also up 200bps YoY at 63-65%.
Along the expected lines, demand was bolstered by MICE and weddings. As per our channel checks, forward hotel rates between May-July 2024 pan-India are up 7-8% YoY.
While FY24 (April-23-March-24) was a stellar year with industry RevPAR growth at 14% and with various industry estimates pegging industry supply CAGR at 5-6% over FY24-28E versus demand CAGR at ~10%, we expect high single digit ARR CAGR of 7-9% across hotels over FY24-26E with occupancies rising 100-200bps each in FY25E and FY26E.
Reiterate Hold on Indian Hotels Company Ltd., Add on Lemon Tree Hotels Ltd. and Buy on Chalet Hotels Ltd.
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