Credit rating agency, India Ratings and Research (Ind-Ra) in its latest report has said that the hotel sector's revenue per available room (RevPAR) is expected to remain strong in FY26, similar to FY25, but near its peak.
According to the report, occupancy rates are expected to be supported by ongoing business events, international gatherings, and leisure travel, despite potential economic slowdowns due to prolonged trade war concerns. The report further noted that Ind-Ra rated hotel companies had occupancy rates of 70%-73% in 2HFY25, which are expected to remain steady in FY26.
Ind-Ra also stated that the balance sheet leverage of the Indian hospitality sector has improved significantly in recent years, driven by strong cash flow generation, deleveraging efforts, and disciplined capital expenditure. Many hotel companies have reduced their debt post-COVID, benefiting from enhanced profitability, asset monetisation, and equity fund raises.
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