Highlights
- Hotel stocks, including ITC Hotels and Schloss Bangalore, gained up to 8.5 per cent this week despite a soft broader market.
- Industry revenue per available room rose more than 20 per cent year on year in May 2026.
- Higher average room rates and improved occupancy drove the RevPAR recovery.
- Demand is supported by domestic tourism, corporate events and limited new room supply in key cities.
Hospitality stocks have carved out a pocket of strength in an otherwise watchful market. Shares of ITC Hotels (NSE:ITCHOTELS), Schloss Bangalore, the operator of Leela hotels, and other listed hoteliers gained as much as 8.5 per cent in recent sessions, propelled by industry data showing revenue per available room rose more than 20 per cent year on year in May 2026.
The RevPAR expansion was built on both levers: average room rates increased while occupancy improved meaningfully, aided partly by a soft base, as regional geopolitical tensions had dented travel demand in May last year. Even adjusting for that base effect, the sector's pricing power has been conspicuous.
A demand cycle broader than leisure travel
Industry commentary around the data points to a demand mix that has matured beyond the post-pandemic leisure surge. Corporate travel, conferences and events, weddings, and steadily improving aviation connectivity are now doing much of the work, while new room supply in key metro markets remains limited. That demand-supply equation underpins the sector's ability to push room rates without sacrificing occupancy.
Why investors are gravitating to hotels now
With the June-quarter earnings season opening and benchmarks trading cautiously, the Sensex closed at 76,741.82 on Thursday, 9 July, investors have rotated towards domestically driven earnings stories that are insulated from crude oil and export-linked risks. Hotels fit that description: their cost base is largely rupee-denominated, demand is domestic, and operating leverage is high when occupancy climbs. Indian Hotels Company (NSE:INDHOTEL) ended FY26 with 16 per cent revenue growth and a net cash position reported at about Rs 4,300 crore, illustrating the sector's repaired balance sheets.
What market participants will monitor next
The immediate checkpoint is Q1 FY27 results, where the market will look for confirmation that the May RevPAR strength persisted through June, and for management commentary on the second-quarter wedding and conference calendar. Room addition pipelines, management-contract signings for asset-light growth, and any moderation in rate growth as new supply arrives in 2027 are the medium-term variables. Monsoon-season occupancy in leisure destinations will also be tracked.
The listed hospitality field
Beyond ITC Hotels and Indian Hotels, the investable set includes Lemon Tree Hotels (NSE:LEMONTREE), which is executing a group restructuring announced earlier this year, Chalet Hotels (NSE:CHALET), Juniper Hotels and SAMHI Hotels, spanning luxury, upscale and mid-market segments. The breadth of the listed universe has widened materially over two years, giving the RevPAR cycle multiple expressions on the bourses.
For now, the sector enters the results season with momentum, pricing power and clean balance sheets, a combination that explains why hotel counters are outrunning a hesitant market.
FAQs
Q: Why is the company in focus today?
A: ITC Hotels and other hospitality stocks gained up to 8.5 per cent this week after industry data showed May RevPAR rose more than 20 per cent year on year. The sector's strength stands out against a cautious broader market.
Q: What factors are investors monitoring?
A: Investors are watching whether the RevPAR momentum carried into June and the Q1 FY27 results, along with room rate trends, occupancy, and expansion pipelines. Commentary on corporate events and wedding-season demand is another focus area.
Q: Which peer companies are relevant?
A: Indian Hotels Company (NSE:INDHOTEL), Lemon Tree Hotels (NSE:LEMONTREE), Chalet Hotels (NSE:CHALET), Schloss Bangalore and SAMHI Hotels are the relevant listed peers across luxury, upscale and mid-market hospitality.
Q: Is this article investment advice?
A: No. This article is intended solely for informational purposes and should not be considered investment, financial or trading advice.