Preview of Q4 results in the Hotel industry: IRCTC and Chalet Hotels to Lemon Tree anticipate strong revenue growth

In the latest news from the hotel industry, a strong revenue growth is anticipated for the fourth quarterly results ending on March 31, 2024 (Q4FY24). The sector has seen an increase in demand, with nationwide average occupancy rates rising from 66-68% in January 2024 to 72-74% in February 2024. Notable expansions have been observed across hotels, luggage, and aviation segments, hinting at a positive outlook for the industry.

Several factors are driving the high expectations for Q4 results in the hotel industry. A robust economy, increased demand for meetings, incentives, conferences, and events (MICE), a rise in scheduled events, substantial growth in foreign tourist arrivals, and a 5% uptick in domestic passenger traffic contribute to the optimistic forecast.

Despite a 26% surge in new hotel openings, a 10% drop in room additions has been noted between April 2023 and February 2024, according to the HVS Anarock report. Looking ahead, Elara Capital predicts growth in average room rates and occupancy driven by strong leisure and business travel in the coming months.

Within the hospitality sector, Prabhudas Lilladher expects double-digit growth in average room rates for Chalet and Lemon Tree hotels, with projected EBITDA margins of 46.0% and 49.7%, respectively. For IRCTC, a 17.2% YoY growth in top-line is expected, while Lemon Tree anticipates a 12.8% YoY increase in ARR. Safari Industries and VIP Industries are also projected to experience growth in their top-line for Q4FY24.