India sees low supply of hotels in FY24, average room rates to touch new highs: ICRA

With demand still outpacing supply, Indians will continue to pay more for hotel stays and room rates, says ICRA, with the current supply pipeline lower than post-FY09. In the last two financial years, while room inventory increased by around 5%, demand grew by 8-10%. A similar trend is expected to continue in FY25 and FY26 with the pace of hotel room supply growing between 4-5% and demand increasing by 8-9 %. Although supply announcements have picked up in the last 18-24 months, it is expected to lag demand over the next few years.