September 4, 2025

The hotel industry is buzzing in FY26! Stocks have zoomed up as much as 50%, riding a wave of strong growth, huge demand, and exciting news around the upcoming GST Council meeting, often called GST 2.0. Everyone expects new tax cuts and simpler rules that could supercharge the sector. Why the excitement? Lower GST on hotel services means cheaper stays for guests. When rooms become more affordable, demand shoots up — a perfect recipe to speed up recovery after tough years. So far this year, major hotel stocks with big market values (over Rs 1,500 crore) have shown dazzling double-digit gains. Star performers include Samhi Hotels and Royal Orchid Hotels, surging between 45% to 50%. Lemon Tree Hotels, ITC Hotels, Mahindra Holidays & Resorts India, and Chalet Hotels also wowed investors with 20%–30% jumps. But Indian Hotels Company (IHCL), the giant in the field, stayed mostly steady with a slight downward tint, says ACE Equity data. Looking ahead, experts at Nuvama Institutional Equities are optimistic. Their Q1 FY26 review predicts a strong second half, thanks to festival travel, winter tourism, and wedding season bookings. With premium and luxury hotels in short supply, room prices are expected to rise. Lemon Tree and Samhi’s ongoing renovations should also juice up profits in the next 12 to 18 months. Big expansion plans are rocking the sector: Lemon Tree added 1,273 rooms through 14 new deals; IHCL has over 90 hotels waiting in the wings; Ventive clinched a record Marriott contract for 1,582 keys! Juniper aims to double its rooms by FY29, and Samhi is crafting 1,000+ high-end rooms under fancy brands like W and Westin. Cutting debt is another hot priority. Lemon Tree slashed Rs 2.06 billion in debt year-on-year, while Samhi lowered its leverage thanks to fresh funds from GIC. Lemon Tree’s Q1 FY26 results are shining. Despite global uncertainties, rising room rates and higher occupancy pushed growth. Temporary pressures on EBITDA margins from renovations and tech upgrades are expected to clear by H1 FY27, promising better profits ahead. Though revenue forecasts haven’t changed much, EBITDA predictions got a lift — helping Lemon Tree keep its ‘BUY’ rating with a Rs 166 target, suggesting a 17% upside. Plus, Yes Securities’ review spots Lemon Tree, Chalet Hotels, and Apeejay Surrendra Park Hotels as smart buys. Lemon Tree’s occupancy jumped 580 basis points, average room rates rose 10%, and key brands like Aurika and Red Fox are rocking the numbers. Chalet Hotels posted 26% revenue growth despite some occupancy dips due to fresh hotel supplies and geopolitical factors. Apeejay Surrendra Park Hotels holds strong with steady revenue, thanks to its classy boutique charm and unique food offerings, aiming for more growth soon. Adding to the buzz, JM Financial highlights Lemon Tree’s recent win of a 2.25-acre prized land at Delhi Development Authority’s auction. This spot in Nehru Place will house a luxury 5-star Aurika hotel with 500+ rooms! It’s a big step to expand Lemon Tree’s owned and leased portfolio, which currently has just two hotels and 256 keys. The new project will be paid for with a smart mix of debt, earnings from the company, and money from a planned listing of Fleur Hotels — Lemon Tree’s own property arm. Exciting times for hotel investors and travelers alike! (Disclaimer: Recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of The Economic Times)

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Tags: Hotel sector, Gst 2.0, Stock surge, Lemon tree hotels, Hotel expansion, Debt reduction,