The World Cup boost to hotel occupancy rates

Quoting data released by HVS Anarock for October 2023, an Emkay Research report says a pick-up in hotel occupancy rates of +6 percentage points (pp) year-on-year (YoY) and +2 pp month-on-month (MoM) is indicated. This growth is aided by the Cricket World Cup, it says.

"New Delhi, Mumbai, Pune, and Hyderabad witnessed over 20 per cent YoY improvement in ADR (average daily rate) and increased occupancy of over +5 pp YoY. A similar strength in trend was observed in domestic air travel passengers in India, which was up 11 per cent YoY in Oct-23," the report notes.

"Foreign Tourist Arrival (FTA) was up 18 per cent YoY in Sep-23, though it is still below pre-COVID levels by ~16 per cent YTDCY23 (year-to-date calendar year 2023), indicating scope for further improvement. We see continued strength in average hotel rates in Q3/Q4FY24 for three companies under our coverage," it adds.

"Given favourable demand-supply dynamics over the long term, we reiterate our ADD rating on our hotel names, i.e., Indian Hotels Co. Ltd. (IHCL), Lemon Tree Hotels (LTH), and Chalet Hotels. The upward trajectory in average rates continues amid strength in demand. The occupancy rate has further increased by +6pp YoY and +2pp MoM. National hotel occupancy rates for October 2023 exceeded pre-pandemic levels by 1-3pp, aided by the ICC Men's Cricket World Cup. The Cricket World Cup, in particular, improved hotel occupancy in various markets hosting the matches." 

Read the Emkay Research report here.