The ongoing conflict in West Asia is impacting direct and indirect travel from this region to India. However, the industry demand is largely driven by domestic travellers and direct impact from reduced foreign tourist arrivals (FTAs) is expected to be limited. Nevertheless, the situation remains uncertain, and impact on business travel spend, LPG shortages and other inflationary factors remain monitorables.  ICRA estimates room occupancy and average room rates (ARRs) of 72-74% and Rs. 8,200-8,500, respectively, in FY2026 against 70-72% and Rs. 8,000-8,200, respectively, in FY2025. Geopolitical disruptions in early March 2026, leading to international flight cancellations stranding tourists and travellers in India, resulted in extended stays. Liquified petroleum gas (LPG) shortage in the current month, due to the ongoing conflict in West Asia, is expected to have a marginal impact on food & beverages (F&B) revenues so far, given the adoption of alternate modes of cooking.

Exhibit : Trend in Current Sentiment Index (CSI) and Future Expectation Index (FSI)

Source: Urban consumer sentiments RBI; ICRA Research; Note - CSI and FEI are compiled on the basis of net responses on the economic situation, income, spending, employment and the price level for the current period (as compared with one year ago) and a year ahead, respectively. CSI and FEI = 100 + Average of Net Responses of the above parameters.