Tag Archives: ICRA

Growth of India’s hospitality sector is expected to normalise at 6-8 per cent in the current financial year, said ICRA while downgrading the sectoral outlook to stable from positive. It also stated that Foreign Tourist Arrivals (FTAs) to India are expected to remain muted in the next few months in the aftermath of the terror attack at Pahalgam in Jammu and Kashmir.

ICRA has revised the outlook on the Indian hospitality industry to stable from positive, considering the expectations of normalised revenue growth of 6-8% in FY2026 on the high base, posted after three years of double-digit revenue expansion seen by the industry over FY2023 to FY2025. It estimates pan-India premium hotel occupancy to hold at 72-74% in FY2026, slightly higher than the 70-72% levels witnessed in FY2024 and FY2025.

As per ICRA, domestic air passenger traffic has shown strong growth. In January 2025, passenger traffic grew by 14.5 per cent YOY and was 17.9 per cent higher than pre-Covid levels. However, the industry is expected to incur net loss of ₹2,000-3,000 cr in FY25 and FY26 due to high ATF prices and borrowing costs.

As per ICRA’s latest report, the domestic air passenger traffic for December 2024 was estimated at 153 lakh, higher by 7.3 per cent in comparison to 142.5 lakh in November 2024. It witnessed a YoY growth of 10.8 per cent and remained higher by 17.5 per cent than pre-COVID levels of 130.2 lakh seen in December 2019.

ICRA expects Indian hospitality industry’s revenue to grow by 7-9 per cent YoY in FY2025 and 6-8 per cent YoY in FY2026. It estimates pan-India premium hotel occupancy to improve to 72-74 per cent in FY2026 from 70-72 per cent in FY2025. The ARRs for premium hotels may rise to ₹7,800-8,000 for FY2025 (up 8 per cent YoY) and to ₹8,000-8,400 in FY2026.

Kinjal Shah, Senior Vice President, Co-Group Head, ICRA has estimated a rise in domestic air passenger traffic to 164-170 million in FY2025, reflecting year-on-year growth of 7-10 per cent, while the international passenger traffic for Indian carriers will reach 34-36 million for the full year, representing a YoY growth of 15-20 per cent.

As  per ICRA report, domestic air passenger traffic saw YoY growth of 8.6 per cent in comparison to 121 lakh in July 2023 and higher by 10 per cent than pre-Covid levels. However, it was estimated at 131 lakh in July 2024, 0.5 per cent lower vis-a-vis 132.1 lakh in June 2024.

ICRA’s report on India’s aviation industry says, April 2024 saw 132.8 lakh domestic air passengers, which was 0.6 per cent lower than 133.7 lakh in March 2024. However, it grew by 3 per cent on a y-o-y basis and was higher by 21 per cent than pre-COVID levels. The airlines’ capacity deployment in April 2024 was higher than April 2023 by 2 per cent.

Indian aviation industry is set to scale new heights. According to a recent report by ICRA, the domestic air passenger traffic is estimated at 154 million for FY2024, which represents a YoY growth of 13%, in line with ICRA’s estimates. Further, the domestic air passenger traffic in FY2024 has surpassed the pre-Covid levels of 142 million in FY2020 as well.

As per ICRA, Indian hotel industry is expected to witness a 7-9 per cent revenue growth by the year 2025. The domestic leisure travel, demand from meetings, incentives, conferences, and exhibitions (M!CE), including weddings and business travel are likely to drive demand for occupancy.