The hotel industry remains optimistic about revenue and occupancy in 2022-23, buoyed by a strong show in the first quarter.
According to data compiled by Icra, occupancy levels in premium hotels across the country were in the range of 56-58 per cent during the quarter, up from 40-42 per cent in FY22 and close to pre-Covid occupancy of 60-62 per cent in Q1FY20.
The average room rent (ARR) was in the range of Rs 4,600-4,800 during Q1FY23, as against Rs 4,200-4,400 in FY22.
However, the average room rent was still at a discount of 16-18 per cent compared with pre-Covid levels.
“The hospitality industry has made a strong comeback and has been successful in recovering from the pandemic blues. The consumer sentiment has turned positive due to the overall vaccination drive, introduction of booster shots, offices reopening in full swing in some places and easing up of restrictions,” said K.B. Kachru, vice-president, Hotel Association of India and chairman emeritus & principal advisor, South Asia, Radisson Hotel Group.
The recovery in hotels was primarily driven by the leisure markets such as Gulmarg, Pahalgam, Shimla, Dharmasala, Jaipur, Goa and Munnar.
However, with business travel picking up, Mumbai, Bangalore, Hyderabad and Pune are also showing signs of improvement in occupancy.
“Leisure and business travel has made a stronger recovery post the third wave of the pandemic. MICE events slowly coming back have helped the positive growth of occupancy rates which is also reflected in the ARRs which are back to pre-pandemic rates and even higher at some hotel chains,” said Kachru.
He added that the coming holiday season would be a key period for the domestic hospitality industry.
“If the situation remains as it is now or improves, the occupancy rate in hotels may strongly spread to non-metro stations and that will be a great contribution to employment and income generation,” Kachru said.
The pace of recovery in the mid-scale hotels, however, has been slower primarily due to dependence on business travel and cost inflation.
RIL wants end of gas price cap
Reliance Industries Ltd expects prices of natural gas in India to rise again in October but wants the government-dictated caps to go, in a bid to align domestic rates with global energy prices.
The conglomerate expects the price cap for its KG-D6 gas sales to rise over the current $9.92 per million British thermal units, Sanjay Roy, senior vice-president for exploration and production, said in an investor call following the announcement of the firm’s quarterly earnings on Friday.
After remaining a loss-making provision for several quarters, Reliance’s gas exploration business has begun reaping the rewards of a global surge in energy prices that have already pushed the rates to a record high.
The government sets gas prices every six months based on international rates. The price of gas from old or regulated fields was more than doubled to a record $6.1 per mBtu from April 1, and that for difficult fields like those lying in deep sea to $9.92 per mBtu.
PTI
