The revision in the Flight Duty Time Limitation (FDTL) norms caused temporary flight disruptions in early December 2025. The impact on hotel bookings was largely contained, as travellers extended their stays due to flight cancellations and took alternative modes of transportation to reach destinations which, coupled with bulk bookings due to the wedding season, reduced the impact to an extent.
ICRA estimates room occupancy and average room rates (ARRs) of 69-71% and Rs. 8,100-8,200, respectively, in 9M FY2026, over 69-71% and Rs. 7,800-7,900, respectively, in 9M FY2025. Weddings and travel during long weekends in addition to business travel supported robust occupancy of 76-78% in Q3 FY2026, despite temporary travel disruptions due to flight cancellations in early December 2025. Sentiments have recovered from the travel disruptions seen in the first quarter due to the terror attacks and geopolitical developments.
ICRA expects the Indian hospitality industry’s revenues to continue to grow in FY2026, despite the high base of FY2025. The growth is likely to be supported by domestic leisure travel, demand from meetings, exhibitions, conferences and events (MICE), weddings and business travel. ICRA anticipates the pan-India premium hotel occupancy rate to hold at 72-74% in FY2026, largely similar to 70-72% in FY2024 and FY2025. The ARRs for premium hotels are projected to rise to Rs. 8,200-8,500 in FY2026, after a healthy Rs. 8,000-8,200 in FY2025.
