India’s listed hotel companies entered fiscal year 2027 (FY27) facing disrupted international travel and weaker foreign tourist arrivals as the West Asia conflict escalated. Yet resilient domestic demand helped cushion the shock, with hotel occupancy and revenue per available room (RevPAR) strengthening in May and June.
With high-paying foreign guests temporarily harder to attract, operators leaned more heavily on domestic corporate travel and MICE (meetings, incentives, conferences and exhibitions) to keep rooms filled.
HVS Anarock data show hotel occupancy at 63-65% in May, up 6-8 percentage points from a year earlier, and 64-66% in June, up 3-5 percentage points year-on-year. RevPAR rose 22-24% year-on-year in May, to ₹4,977-5,265, and 17-19% in June, to ₹5,056-5,346.
Prashant Biyani, vice-president, institutional equity at Elara Capital, told Mint the quarter marked a shift in how hotel companies drove revenue growth. Unlike the previous year, when RevPAR expansion was led largely by higher average room rates (ADR), most operators this quarter focused on boosting occupancy as geopolitical tensions and the disruption to international travel impacted the arrivals of high-paying foreign guests.
Biyani said the first half of FY27 will remain occupancy-led, with room rates likely to recover in the second half as international travel normalizes during the peak season.
Ashish Jakhanwala, managing director and chief executive of SAMHI Hotels Ltd, said the quarter witnessed some disruption to international travel due to the West Asia conflict. “However, the resilience of domestic demand, supported by sustained corporate travel and MICE activity, enabled us to deliver healthy growth and maintain strong operating performance across our portfolio.”
Akash Datta, managing director (South Asia), HVS Anarock, said India’s hotel sector entered FY27 on a strong footing, with first-quarter results of listed hotel companies indicating healthy operating fundamentals. “Most companies reported revenue growth, ranging from approximately 7-28%, supported by resilient domestic demand, portfolio expansion and positive RevPAR performance,” he said.
Datta added that variations across companies reflected differences in portfolio composition, new hotel additions, finance costs and one-off items. “This makes underlying operating indicators rather than headline growth alone increasingly important when assessing performance.”
Expansion accelerates
The resilience in operating performance is coinciding with a push to add rooms. HVS Anarock data show that 179 properties, comprising about 20,000 rooms, were signed between January and May, underscoring the pace of expansion. Several operators also acquired existing hotels, while others expanded through new brand tie-ups and management signings, allowing them to add inventory faster than through greenfield development.
Indian Hotels Co. Ltd (IHCL), for instance, expanded its pipeline to 255 properties. ITC Hotels acquired 130-room Welcomhotel Ahmedabad for an enterprise value of ₹155 crore, while SAMHI Hotels bought boutique luxury property Itmenaan Estate, with eight rooms and cottages, for ₹12 crore in Almora, Uttarakhand. Chalet Hotels completed the acquisition of Seasons Hotels Pvt. Ltd for ₹171 crore, taking over the 144-room Inder Residency Resort & Spa in Udaipur.
ITC Hotels said the June quarter was marked by uncertainty stemming from the West Asia conflict, which disrupted air travel and led to broad-based demand softness across key markets in April, reflected in weaker foreign tourist arrivals. Occupancy and room rates recovered in May and June as travel sentiment improved. Room revenue rose 8% year-on-year, while food and beverage revenue increased 11% and management fee income grew 35%.
Leela Palaces, Hotels & Resorts reported a nearly five-fold increase in net profit to ₹48.8 crore in Q1FY27, helped by stronger operating performance and lower finance costs following debt reduction through its initial public offering. It also absorbed a ₹15.6 crore accounting loss from its Dubai joint venture, where the West Asia conflict temporarily affected travel demand.
SAMHI Hotels continued its acquisition strategy with the purchase of boutique luxury property Itmenaan Estate for ₹12 crore. It said total investment, including expansion and renovation, would be capped at ₹25 crore as it prepares for a stronger capital expenditure cycle and evaluates further acquisition opportunities.
EIH—the operator of The Oberoi and Trident Hotels—saw consolidated net profit rise to about ₹120 crore in the June-ended quarter from around ₹37 crore a year earlier. The increase was aided by a favourable base effect: the year-ago quarter included a ₹110.49 crore exceptional loss, largely related to adjustments following the resolution of the long-running Wildflower Hall dispute. It had also recognized a ₹30 crore one-time provision in FY26 towards higher employee-benefit liabilities following the new labour codes.
Chalet Hotels saw consolidated revenue decline after its real estate business fell significantly following the completion of residential sales last year, but its core hospitality business remained resilient, with hotel revenue rising 8.6% year-on-year to ₹418.5 crore in Q1.
Similarly, Ventive Hospitality, owner of JW Marriott Pune and others, backed by Blackstone and Panchshil Realty, saw an 8% increase in its hotel business revenue.
Pricing test
The next test will be whether resilient demand can translate into pricing power. Biyani expects the first half of FY27 to remain occupancy-led, with room rates recovering in the second half as international travel normalizes during the peak season.
As per ratings agency Icra Ltd, the hospitality industry is expected to post revenue growth of 7-9% in FY27 after an estimated 11% expansion in FY26. The rating agency expects premium hotel occupancy to remain at 72-74%, broadly unchanged from last year, while average room rates are projected to rise to ₹8,600-8,800.