The Daily Brief Indian hotels: a quarter of repairs
Dec 1, 2025
Explore the Indian hotel industry's seasonal dynamics and their approaches to renovations during slow months. Discover IHCL's earnings and how room upgrades could elevate their average daily rates. Dive into Chalet's ambitious expansion plans and Lemon Tree's revenue-boosting renovations. Shift focus to corporate capital allocation trends, including the rise of intangible investments and the complexities of M&A. Finally, get insights on R&D spending and strategies for effective capital allocation.
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Using Slow Months To Upgrade Premium Hotels
- Slow-season renovations depressed current revenue but are investments to raise future room rates and banquet income.
- Akshara notes IHCL expects renovated rooms to lift ADR by ~12–15% in the second half of the year.
Ownership Captures Most Hotel Profits
- Chalet keeps most revenue by owning buildings and leasing brand/operations to Marriott or Accor.
- The company will spend Rs 2,500 crore over three years and launch its own brand, Ativa, to cut brand fees.
Renovations Can Rapidly Boost RevPAR
- Lemon Tree paused renovations during COVID and is now completing 4,600 rooms, spending ~Rs 460 crore total.
- Upgrades already raised RevPAR significantly and management expects margins to expand once renovation costs fall by FY28.