Anticipating Q4 Results: Hotel Industry Expected to See Strong Double-Digit Revenue Growth Amid High Demand

The travel industry is expected to report stronger earnings for the quarter ended on March 31, 2024 (Q4FY24), with notable growth in the hotels, luggage, and aviation sector. According to Prabhudas Lilladher (PL), the hospitality sector saw a significant increase in occupancy levels, with all India average occupancy standing at 66-68 per cent in January 2024 and rising to 72-74 per cent in February 2024.

Key drivers for the strong performance in Q4 include healthy economic growth, robust demand for meetings, incentives, conferences, and events (MICE), scheduling of various events, high double-digit growth in foreign tourist arrivals, and a 5 per cent growth in domestic passenger traffic. Additionally, new hotel openings saw a 26 per cent growth, with 146 new hotels opening between April 2023 and February 2024, but a 10% decline in room additions to 9,833 during the same period.

In terms of specific companies, VIP Industries is expected to see top-line growth of 16.3 per cent YoY, Safari Industries to grow its top-line by 27.2 per cent YoY, and IRCTC to experience a 17.2 per cent YoY growth in top-line. For Chalet Hotels, revenue is projected to grow by 36.6 per cent YoY with an EBITDA margin of 46.0 per cent. Lemon Tree is expected to report a 26.9% YoY growth in revenue with an EBITDA margin of 49.7%.

The positive outlook for the hotel industry is backed by strong leisure and growing business travel, as well as a robust macroeconomic environment for India. Overall, the industry is expected to sustain demand and continue its growth trajectory in the coming quarters.