May 2025 Dips with War Clouds and Global Uncertainty, June is Better!

FY2025 began on a strong footing for the Indian hotel sector, with April 2025 sustaining the growth momentum witnessed over the past year. The industry recorded robust year-on-year gains across all key performance metrics, with average rates rising by 11-13% and occupancy increasing by 4-6 percentage points, edging even higher than March 2025 levels. However, May 2025 saw a seasonal dip, further compounded by the India-Pakistan conflict, which led to a noticeable decline in occupancy across most major markets. Nationwide occupancy fell by 1-3 percentage points year-on-year, although average rates remained resilient, growing by 6–8%. This reflects a structural shift in pricing strategy, with hotel operators showing greater rate discipline and no longer resorting to deep price cuts in response to short-term demand dips. Preliminary data for June suggests that performance remained seasonally soft. Additionally, the Air India mishap, coupled with a spate of flight cancellations and broader challenges in the aviation sector, may have further dampened travel sentiment, although stable pricing continues to provide some cushion to overall performance.