India's leading hotel operators are opening their wallets to spruce up some of their oldest and most iconic properties, with consultants estimating that the combined renovation bill could reach ₹2,000-3,000 crore in FY27.
During their fourth-quarter earnings calls, EIH Ltd, Indian Hotels Co. Ltd (IHCL) and Lemon Tree Hotels Ltd said they were stepping up capital expenditure on marquee assets to preserve pricing power and drive higher yields.
A common theme
EIH, an Oberoi Group company, outlined a multi-year refurbishment programme as it looks to strengthen its existing portfolio while awaiting new room additions.
Renovation work, including structural upgrades, is underway at The Oberoi Grand, Kolkata, while nearly 90 rooms at The Oberoi, Bengaluru, are being refurbished in phases. Four floors each at The Oberoi, Mumbai, and Trident Nariman Point are also being renovated, along with a complete revamp of food and beverage outlets at Trident Bandra Kurla Complex.
The projects are being executed in phases and timed to coincide with lean seasons to minimize the impact on occupancy.
EIH spent ₹600-700 crore in 2025-26 alone, and expects to maintain a similar annual run rate over the next one to two years, before spending rises around FY29-FY30 as larger projects enter execution.
The company renovated its iconic The Oberoi, New Delhi, a few years ago. The hotel, which was shut for 20 months, now generates more than twice, and “probably closer to three times”, the gross operating profit it did before the refurbishment, said he said managing director and chief executive Vikramjit Singh Oberoi on the call, adding that he expected The Oberoi Grand in Kolkata to witness a similar ramp up because of its strong brand recall and established customer base.
During IHCL's Q4FY26 earnings call, managing director and chief executive officer (CEO) Puneet Chhatwal said it was investing in refreshed assets alongside new brands, digital capabilities and emerging hospitality formats to position itself for long-term relevance.
“Over the last three years, we have invested over ₹2,500 crore in capital expenditure to strengthen our iconic assets and enhance strategic capabilities. We will spend ₹1,000-1,200 crore annually to strengthen our existing competitive advantages and at the same time, build new ones,” he said.
A preservation bid
Hotel operators are investing in existing assets where demand is already proven, Vikramjit Singh, founder and chairman and managing director of Alivaa Hotels and ex-president of Lemon Tree Hotels, told Mint. “Their renovation capex directly translates into pricing power, which is why brands are focusing on upgrading marquee hotels in established markets rather than refurbishing every property in the portfolio.”
Lemon Tree Hotels, too, is nearing the end of a multi-year catch-up refurbishment programme across its owned portfolio. During the Q4FY26 earnings call, chairman Patanjali G. Keswani said the company undertook “hard calls” that weighed on costs to upgrade ageing assets, including guest rooms, public areas and critical equipment such as air-conditioning systems and generators. Of the roughly 5,000 rooms identified for renovation, about 4,000 required heavy refurbishment, and around 85% of that work has already been completed.
Keswani added that renovation expenditure, which accounted for 5.8% of revenue spent on goods and services tax, technology, and refurbishment in FY26, is expected to decline to 1.9% of revenue in FY27 before normalizing to 1.2-1.4% in subsequent years. Based on its FY26 revenue of ₹1,444 crore, the guided renovation spend for FY27 would amount to about ₹27 crore, roughly half of which would be capitalized.
The Leela Palaces, Hotels and Resorts has also focused on asset enhancement. During FY26, it refurbished and added seven food and beverage outlets across properties, including in New Delhi and Jaipur, relaunched a luxury retail space in Bengaluru, upgraded spa and wellness facilities and converted villas into premium private villas.
The company said these initiatives are expected to generate a projected 25% yield on cost. “These flagship hotels are the most important assets for these companies. They have a very important role not only in the top line of the hotel but also in establishing the overall positioning of the brand,” said Akash Datta, managing director, hotels and hospitality group at consultancy HVS Anarock.
While major refurbishments can improve room rates and profitability in some cases, the broader objective is often to protect pricing power rather than to chase incremental gains. “It's to protect a company's top line. If they do not upgrade their marquee assets, they probably see a risk in rates coming down,” Datta said.
Extensive refurbishments can also lower operating costs by replacing ageing infrastructure with newer technology, while allowing hotels to reposition themselves for changing consumer preferences, he added.