{"id":24247,"date":"2022-11-25T13:25:25","date_gmt":"2022-11-25T07:55:25","guid":{"rendered":"https:\/\/flattrade.in\/kosh\/?p=24247"},"modified":"2022-11-25T13:30:19","modified_gmt":"2022-11-25T08:00:19","slug":"hotel-industry-to-grow-in-fy23-on-demand-recovery-and-asset-light-expansion-says-crisil-ratings","status":"publish","type":"post","link":"https:\/\/flattrade.in\/kosh\/hotel-industry-to-grow-in-fy23-on-demand-recovery-and-asset-light-expansion-says-crisil-ratings\/","title":{"rendered":"Hotel industry to grow in FY23 on demand recovery and asset-light expansion, says CRISIL Ratings"},"content":{"rendered":"\t\t<div data-elementor-type=\"wp-post\" data-elementor-id=\"24247\" class=\"elementor elementor-24247\">\n\t\t\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-3a23ca11 elementor-section-boxed elementor-section-height-default elementor-section-height-default\" data-id=\"3a23ca11\" data-element_type=\"section\" data-e-type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-7e319029\" data-id=\"7e319029\" data-element_type=\"column\" data-e-type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-6512d419 elementor-widget elementor-widget-text-editor\" data-id=\"6512d419\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p>The Indian hotel industry is expected to register a significant improvement in profitability in the current fiscal aided by higher average room rate (ARR) and occupancy, according to a report by CRISIL Ratings. Profitability as represented by earnings before interest, tax, depreciation and amortisation (EBITDA) margin, is expected to be about 34% in FY23, compared with 24% in pre-pandemic year (FY20), the report added.<\/p><p>The report said that revenue is likely to rise about 23% over the pre-pandemic level, on the back of robust recovery in business travel and continued traction in leisure travel.<\/p><p>\u201cLeisure travel had gained traction post the Delta wave last fiscal, while business travel has started picking up steadily after a much milder Omicron wave in Jan 2022,\u201d said Mohit Makhija, Senior Director, CRISIL Ratings.The pick up in business and leisure travel is creating demand for meetings, incentives, conventions and events segments, Makhija added.<\/p><p>CRISIL Ratings noted that improvement in international business travel in the second half of this fiscal will strengthen the industry performance. Makhija, further, said that occupancy will rise to about 73% this fiscal compared to 68% in FY20), while average room rate (ARR) should increase 8-10%.<\/p><p>CRISIL Ratings said that strong business performance along with limited capital spend, will improve the credit profiles of firms in the hotel industry. The above estimates is according to CRISIL Ratings analysis of hotels with an aggregate of about 40,000 rooms across categories.<\/p><p>Further, the gap between demand and supply will aid the improvement in ARR. While the sharp demand recovery is expected to increase capital expenditure, supply will take a some time to meet the rising demand because of the long gestation period for setting up a greenfield hotel and that scenario is likely to favour existing hotels.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-45109363 elementor-section-boxed elementor-section-height-default elementor-section-height-default\" data-id=\"45109363\" data-element_type=\"section\" data-e-type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-61b34351\" data-id=\"61b34351\" data-element_type=\"column\" data-e-type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-1a297dde elementor-widget elementor-widget-heading\" data-id=\"1a297dde\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"heading.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t<h2 class=\"elementor-heading-title elementor-size-default\"><br>Cost Control Measures<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-49e2615c elementor-section-boxed elementor-section-height-default elementor-section-height-default\" data-id=\"49e2615c\" data-element_type=\"section\" data-e-type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-72e971ec\" data-id=\"72e971ec\" data-element_type=\"column\" data-e-type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-25e3a49a elementor-widget elementor-widget-text-editor\" data-id=\"25e3a49a\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p>CRISIL Ratings stated that the organised players in the hotel industry are increasing their footprint in an asset-light way and increasing their capacity by entering into hotel management contracts for existing standalone properties. This move is likely to limit the companies\u2019 upfront capital costs and keep leverage in control.<\/p>\n<p>Besides, several standalone hotels couldn\u2019t keep their operations running during the last two years due to the pandemic and some of them have also shut down permanently. However, other hotels are exploring opportunities to collaborate with organised players. The branded and organised players have been utilising this opportunity to expand their footprint in a market that is expected to grow well.<\/p>\n<p>Moreover, as the hotel industry was severely hit by the pandemic, several companies had recalibrated their costs and took measure to improve their fixed and operating costs. The measures included reassessing employee headcount using automation and better peak-hour manpower planning. In addition, hotels eliminated high-cost, low-preference items from food and beverage menus and ensured efficiency improvement to keep utility expenses under control.<\/p>\n<p>CRISIL Ratings\u2019 Director, Anand Kulkarni, said, \u201cStrong revenue growth and cost optimisation measures will boost profitability of organised players this fiscal. While the credit profiles were stressed in the last two fiscals, this fiscal will bring a material improvement, with interest coverage estimated at about 4 times against about 2.6 times in fiscal 2020.\u201d He further said that the debt to Ebitda ratio was seen improving to about 1.7 times from about 3.4 times.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-14b9f44 elementor-section-boxed elementor-section-height-default elementor-section-height-default\" data-id=\"14b9f44\" data-element_type=\"section\" data-e-type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-7c82616c\" data-id=\"7c82616c\" data-element_type=\"column\" data-e-type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-5b24a084 elementor-align-center elementor-widget elementor-widget-button\" data-id=\"5b24a084\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"button.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<div class=\"elementor-button-wrapper\">\n\t\t\t\t\t<a class=\"elementor-button elementor-button-link elementor-size-sm\" href=\"https:\/\/ekyc.flattrade.in\/openaccount\/?utm_source=Blog&#038;utm_medium=organic&#038;utm_campaign=Demat+Account\">\n\t\t\t\t\t\t<span class=\"elementor-button-content-wrapper\">\n\t\t\t\t\t\t\t\t\t<span class=\"elementor-button-text\">Open a Free Demat Account<\/span>\n\t\t\t\t\t<\/span>\n\t\t\t\t\t<\/a>\n\t\t\t\t<\/div>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<\/div>\n\t\t","protected":false},"excerpt":{"rendered":"The Indian hotel industry is expected to register a significant improvement in profitability in the current fiscal aided&hellip;","protected":false},"author":5,"featured_media":24248,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"csco_display_header_overlay":false,"csco_singular_sidebar":"","csco_page_header_type":"","csco_page_load_nextpost":"","csco_post_video_location":[],"csco_post_video_location_hash":"","csco_post_video_url":"","csco_post_video_bg_start_time":0,"csco_post_video_bg_end_time":0,"csco_post_video_bg_volume":false,"footnotes":""},"categories":[65],"tags":[631,46,43,95,78,48,26,601,634,630,77,47,24,23,504],"class_list":{"0":"post-24247","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-industry","8":"tag-leisure-travel","9":"tag-market-news","10":"tag-market-update","11":"tag-markets","12":"tag-nifty","13":"tag-nifty-today","14":"tag-nse","15":"tag-pandemic","16":"tag-recovery","17":"tag-resorts","18":"tag-sensex","19":"tag-sensex-today","20":"tag-share-market","21":"tag-stock-market","22":"tag-travel","23":"cs-entry","24":"cs-video-wrap"},"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.2 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Hotel industry to grow in FY23 on demand recovery and asset-light expansion, says CRISIL Ratings - Flattrade Kosh<\/title>\n<meta name=\"description\" content=\"Profitability as represented by earnings before interest, tax, depreciation and amortisation (EBITDA) margin, is expected to be about 34% in FY23, compared with 24% in pre-pandemic year (FY20), the report added. The report said that revenue is likely to rise about 23% over the pre-pandemic level\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/flattrade.in\/kosh\/hotel-industry-to-grow-in-fy23-on-demand-recovery-and-asset-light-expansion-says-crisil-ratings\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Hotel industry to grow in FY23 on demand recovery and asset-light expansion, says CRISIL Ratings - Flattrade Kosh\" \/>\n<meta property=\"og:description\" content=\"Profitability as represented by earnings before interest, tax, depreciation and amortisation (EBITDA) margin, is expected to be about 34% in FY23, compared with 24% in pre-pandemic year (FY20), the report added. 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