As per ICRA, the revision in the Flight Duty Time Limitation (FDTL) norms caused temporary flight disruptions in early December 2025. However, the impact on hotel bookings was largely contained, as travellers extended their stays due to flight cancellations. ICRA anticipates the pan-India premium hotel occupancy rate to hold at 72–74 per cent in FY2026, largely similar to 70–72 per cent in FY2024 and FY2025. The ARRs for premium hotels are projected to rise to ₹8,200–8,500 in FY2026, after a healthy ₹8,000–8,200 in FY2025.
Additionally, it estimates room occupancy and Average Room Rates (ARRs) of 69–71 per cent and ₹8,100–8,200, respectively, in nine months of FY2026, over 69–71 per cent and ₹7,800–7,900, respectively, in 9 months of FY2025. Weddings and travel during long weekends in addition to business travel supported robust occupancy of 76–78 per cent 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.
