Tie the knot, bless the hospitality sector

When the bride and groom go around the fire to take marriage vows, they seem to be also nurturing the bottom line of the hospitality sector. Thanks to the 3.8 million weddings that are supposed to take place in the country in the short window between November 23 and December 15, the hospitality industry is hopeful of putting up delicious financials for the second half of FY24, The Economic Times has reported.

Thanks to the flurry of weddings, the average revenue per available room (RevPAR) is projected to grow by 15-20% in H2 of the current financial year, say analysts. In H1 of this year, RevPAR has recorded a growth of 14%.

The Confederation of All India Traders (CAIT) has expressed a lot optimism based on the numbers and a crucial element of the demand is the requirement for hotel rooms for the functions. CAIT thinks there would be about 3.8 million weddings that could generate business opportunity of a staggering Rs 4.7 lakh crore. It is a jump of 25% compared to the last year.

“Our channel checks for forward hotel rates for the November and January 2024 period indicate that quoted rates are at least 10% higher than the previous year,” brokerage major ICICI Securities said in a note on the hotels industry.

According to data culled from the ministry of tourism, HVS Anarock and Emkay Research, the average revenue per room has been consistently higher between January and October this year compared to the last.
In January, the average was Rs 1,795 which rose to Rs 4,40 in 2023. The comparable figures for October 2022 was Rs 3,820 against Rs 4,852 this year.

Figures of air tourists are also a key factor as is the arrival of tourists from overseas countries. Both of these show signs of improvement in every month of this year compared to the last.

According to the data of the Directorate General of Civil Aviation (DGCA), the average number of passengers who travelled by air in H1 of the current financial year went up by 20% year-on-year compared to FY23.

“At the current trend, we expect FY24 to likely see a 15% year-on-year growth in room rates on average,” wrote Kotak Institutional Equities in a report. The broking firm observed that hotel room rates in the country averaged Rs 6,869 per day in FY23. The rates peaked in February 2023 and reached Rs 8,300 per day. The earlier high water mark was Rs 8,000 recorded in 2008.

In October 2023, passenger traffic grew by 10.5% when compared against the figures of October 2022. The number of foreign tourists who came in H1 of FY24 went up by 27% year-on-year compared to the H1 figures of last year.