Hotel Industry - Covid 2.0 Derails Recovery By Six To Eight Months, Pre-Covid Levels Expected By FY24: ICRA
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ICRA Research Report
We continue to maintain a negative credit outlook on the hotel sector. Industry credit profile has weakened in the last 12-15 months, with negative rating action on 74% entities.
Significant scale-back expected in FY2022 pan-India revenue per available room estimates because of the second wave to ~Rs 1,300-Rs 1,500, at a 60-65% discount to pre-Covid-19 levels, albeit an improvement from the low base of FY2021.
Pandemic timelines pose downside risks to estimates.
Our industry sample is expected to report operating losses in FY2022 as well, although it will be lower at low-single digit, compared to the 23% operating loss witnessed in FY2021.
This will be supported by better operating leverage and sustenance in fixed cost saving initiatives undertaken in FY2021.
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