- India hotel growth to accelerate in fiscal 2027.
- Leisure outperformed business.
- Limited hotel supply could support rates, RevPAR.
INDIA’S HOTEL INDUSTRY is expected to grow faster in the second half of fiscal year 2027, according to PhillipCapital. Growth will be driven by domestic leisure demand and a recovery in corporate and international travel.
A heavier wedding calendar, improving MICE activity and a seasonal rise in international travel from October are expected to support demand, according to a sector report by PhillipCapital India, the Indian arm of Singapore-based PhillipCapital Group. Moreover, limited new hotel supply in key markets could also support room rates and RevPAR.
The brokerage expects demand to remain positive in the second quarter. Domestic leisure demand is expected to hold, while corporate and international travel recover as connectivity improves. Leisure markets outperformed business locations in the first quarter of fiscal year 2027.
Meanwhile, Indian Hotels Co. Ltd. recorded high-20 percent RevPAR growth in Rajasthan and Goa, while Chalet Hotels’ resorts grew 19 percent, compared with about 5 percent for its business hotels. Leela Palaces, Hotels and Resorts’ resorts posted 24 percent RevPAR growth, compared with 14 percent for city hotels.
Corporate travel was affected by geopolitical uncertainty and tighter travel budgets, while international traffic fell amid disruptions linked to the West Asia conflict. Domestic air passenger traffic rose 1.2 percent year over year to 86.3 million in the first quarter of fiscal year 2027. International traffic fell 10.2 percent to 17.9 million, while total passenger movement declined 0.9 percent to 104.2 million.
Monthly trends improved during the quarter, PhillipCapital said. Domestic passenger growth reached 7.7 percent in May before falling 1.2 percent in June, while the decline in international traffic narrowed from 18.3 percent in February to 4.7 percent in June.
Among the companies covered, Leela reported 28 percent revenue growth and 41 percent EBITDA growth in the first quarter of fiscal year 2027. IHCL’s revenue rose 15 percent and EBITDA 18 percent, while ITC Hotels’ RevPAR rose 8 percent and Lemon Tree Hotels’ occupancy increased by 314 basis points.
The industry posted growth in the first quarter despite geopolitical disruptions and normal seasonality. PhillipCapital said pricing remained intact even as occupancy fell in some markets.
Separately, BRICS tourism ministers adopted the Jaipur Declaration on Aug. 21 to strengthen cooperation among member countries. The declaration covers artificial intelligence, sustainable tourism, skills, investment, data exchange and travel facilitation.
