The ongoing conflict in West Asia is impacting direct and indirect travel from the region to India. However, industry demand is largely driven by domestic travellers, and the direct impact from reduced foreign tourist arrivals (FTAs) is expected to be limited. Nevertheless, the situation remains uncertain, and the impact on business travel spend remains a monitorable factor. Disruptions due to LPG shortages have been limited owing to the use of piped gas (wherever available) and a shift to alternate cooking modes such as electric induction, among others.

• ICRA estimates pan-India premium hotel occupancy to have remained flattish in April 2026. While there has been some decline in foreign tourists arrival (FTA) due to the ongoing West Asia conflict, ARRs have largely remained stable, driven by domestic travel demand. Impact on food & beverages (F&B) revenues has also been largely contained through shift to alternate cooking modes and use of piped gas wherever possible. Overall, ICRA does not expect a significant YoY impact on RevPAR at present, as Q1 is a seasonally lean quarter in terms of demand, coupled with the low base of Q1 FY2026 owing to the India-Pakistan conflict.
• ICRA expects the Indian hospitality industry’s revenues to grow by 7-9% YoY in FY2027, following 9-12% growth in FY2026,
• supported by domestic leisure travel, demand from meetings, exhibitions, conferences and events (MICE), weddings, and business travel. ICRA anticipates pan-India premium hotel occupancy to remain at 72-74% in FY2027, largely similar to FY2026 levels, while ARRs for premium hotels are projected to increase to Rs. 8,600-8,800 in FY2027 from Rs. 8,200-8,500 in FY2026. A prolonged conflict, however, would exert downward pressure on these estimates.