New Delhi: BSE-listed Royal Orchid Hotels is pursuing measured expansion as India’s hospitality boom gathers pace, blending asset-light growth with selective ownership bets.
The hotel operator, which runs brands such as Regenta Hotels and Iconiqa Hotels, is expanding primarily through management and franchise agreements while deploying capital cautiously. “We are evaluating acquisitions only where valuations and returns make sense, while navigating India’s complex licensing landscape,” Royal Orchid president Arjun Baljee told Mint.
India’s hotel industry is entering a an expansion cycle which is fuelled by domestic travel and the increasing shift of independent hotels to branded operators. "Domestic travel will remain the main driver of demand as India has 100 million people travelling and international inflow will only be a bonus," Baljee said.
The company has 120 operational hotels, and 48 are in the pipeline. Most of these are operated under management or franchise arrangements. It currently owns six hotels.
One of its larger owned bets is a 291-room Iconiqa property near Mumbai’s Terminal 2 airport district, developed with an investment of about ₹40 crore, Baljee said, adding that the company is keeping balance-sheet exposure contained.
The Bengaluru-based company is targeting 22,000 keys by FY30, which would represent a significant presence in India’s organized hotel market, projected to reach about 350,000 rooms by the end of the decade.
Signing a hotel is easier than opening it, he said. “Announcing a hotel is one thing; ensuring it actually opens is another.” In many cases, hotel companies sign agreements with property owners who then handle construction, licensing and pre-opening work, processes that can stretch timelines.
Chasing midscale
The company is sharpening its focus on the mid-scale segment with the Regenta and Regenta Place, which account for the majority of its hotels. These are in the three- to four-star category, with banquet spaces, restaurants, and meeting facilities.
This focus aligns with the broader industry trend. Midscale hotels are expected to account for about 39% of new room supply in the coming years, according to a report by HVS and Gleads Consulting.
The country’s branded hotel inventory is projected to reach around 350,400 rooms by 2030, largely supported by strong domestic travel demand. Expansion is also moving beyond metros into tier-2 and tier-3 cities, as developers adjust to rising construction costs and seek more viable markets for new projects, the report added.
Royal Orchid’s portfolio also includes the Iconiqa brand, with eight hotels planned by 2030, while at the economy end, it operates Regenta Z, a franchise model targeting smaller neighbourhood hotels.
These hotels allow owners to retain the owner's identity while accessing the company’s distribution, bookings and digital systems without large capital deployment.
The company is present in around 80 cities, with clusters in Bengaluru, Amritsar and Mumbai, and is also exploring emerging micro-locations such as Kevadia near the Statue of Unity.
“As more independent hotels become branded and overall asset quality improves, average room rates will continue to rise, with the industry likely to keep resetting record highs over time,” Baljee said.
According to HVS Anarock, hotel occupancy rose to 66-68% in the quarter ended December, while revenue per available room (RevPAR) increased 3-5% sequentially, supported by festive and year-end demand. RevPAR is a hotel metric that calculates the average revenue generated per room over a given period.
For the three quarters ended December FY26, Royal Orchid reported revenue from operations of ₹154.5 crore, up from ₹150 crore the corresponding three quarters. Profit after tax (PAT) stood at ₹3.3 crore, compared with ₹86 crore in the same three quarters, the company said in its latest filings in February 2026.
Despite strong demand, the hotel industry in India continues to face execution challenges. “As an asset-light company, we rely on developers to build on time and to standard. That is always a risk, though,” Baljee said.
Policy changes such as goods and services tax rationalization and infrastructure projects like the Mumbai-Ahmedabad bullet train corridor could support long-term demand across the hospitality sector, he added.