Revenue per available room

The hotel industry's headline metric: average daily rate multiplied by occupancy.

A hotel achieving ₹8,500 average rate at 72% occupancy earns ₹6,120 per available room.

The measure combines the two levers into one, which is its convenience and its limitation. A hotel can hold revenue per available room steady by cutting rates and filling rooms, which costs more in variable expense than filling fewer rooms at a higher rate.

The decomposition is therefore what matters. Rate-led growth is worth much more than occupancy-led growth at the same headline number.

Indian hotel cycles are long and violent, driven by supply rather than demand. Track rooms under construction in each city.

Supply is what drives the Indian hotel cycle, not demand. Rooms take three to four years to build, so an upturn in rates triggers construction that arrives just as demand softens, and the sector then spends several years absorbing it. Tracking rooms under construction by city is more predictive than any demand forecast.