Hotel Sector Q2 FY26 Performance: Revenue Stability, Profit Surprises & Growth Outlook

The Indian hotel sector delivered a steady, resilient Q2 FY26 performance, marked by stable revenue growth across most companies and exceptional outperformance from a few players. Despite seasonal softness due to monsoon-related travel dips, the industry maintained robust demand momentum driven primarily by corporate travel, domestic leisure tourism, and more vigorous event/banquet activity.

Below is a detailed, SEO-optimized analysis of how the major listed hotel players performed in Q2 FY26.

1. Revenue Growth: Broadly Stable with Standout Performers

Most hotel companies reported consistent revenue growth, supported by business travel and sustained leisure demand:

• IHCL, ITC Hotels, EIH, Mahindra Holidays, and Lemon Tree posted stable YoY revenue trends.
  
  
• Demand remained strong from corporate bookings, MICE events, destination weddings, and premium leisure travelers.
  
  

However, two companies significantly outperformed the industry:

Chalet Hotels Ltd. – 95% YoY Growth

Chalet delivered a remarkable 95% YoY jump in consolidated revenue, driven by:

• Higher corporate occupancy
  
  
• Strong event and banquet activity
  
  
• Optimal utilization of premium hotel and commercial real-estate assets
  
  

Ventive Hospitality Ltd. – 90% YoY Growth

Ventive’s revenue surged 90% YoY, supported by:

• Better asset utilisation
  
  
• Strong demand recovery in key business destinations
  
  
• Improved operational performance
  
  

These two players were the clear outliers, lifting overall sector sentiment.

QoQ Trends

Sequential growth was flat across the industry, as expected in Q2 due to the monsoon season, which usually softens travel activity.

2. Profit After Tax (PAT): Strong Divergence but Largely Positive

Profit trends varied widely across companies, with some recording sharp improvements and others facing margin pressure.

Top Profit Performers

Chalet Hotels – 212% YoY PAT Surge

Chalet’s multi-fold increase in profitability was driven by:

• Strong operating leverage
  
  
• Higher occupancy and ADRs
  
  
• Efficient cost management
  
  

Ventive Hospitality – 270% YoY PAT Growth

Ventive posted the highest YoY PAT jump in the sector, benefiting from:

• Turnaround-driven margin expansion
  
  
• Better cost controls
  
  
• Strong revenue visibility
  
  

Mahindra Holidays & EIH – Steady PAT Gains

Both companies reported healthy YoY profit growth, supported by:

• Better membership traction (in the case of Mahindra Holidays)
  
  
• Premium segment demand for EIH
  
  

Mixed Profitability for IHCL

Despite stable revenue, IHCL's PAT declined 45% YoY, indicating:

• Margin pressure
  
  
• Higher expenses
  
  
• Impact of seasonal softness
  
  

This divergence highlights the importance of efficient cost structures and strong occupancy in driving profitability.

3. Demand Drivers Supporting the Sector

Several structural trends continued to support the hotel industry in Q2:

• Firm corporate travel: Companies reinstated full-scale business travel, boosting weekday occupancy.
  
  
• Rise in ADRs (Average Daily Rates): Premium and luxury hotels continued to increase rates.
  
  
• Event & wedding demand: Banquet hall bookings and corporate events added significantly to revenues.
  
  
• Domestic tourism boom: Tier-2 and Tier-3 destinations showed strong footfall.
  
  

4. Outlook for Q3 FY26: Expect Strong Acceleration

The hotel industry is entering its strongest period of the year Q3 supported by:

• Festive season demand
  
  
• Peak wedding season
  
  
• Year-end corporate events
  
  
• Holiday travel surge domestically and internationally
  
  

With RevPAR (Revenue per Available Room) already improving and ADRs trending upward, Q3 FY26 is expected to deliver:

• Meaningfully higher occupancy
  
  
• Strong revenue growth
  
  
• Better margins and profitability
  
  

Conclusion

Q2 FY26 demonstrated the resilience of the Indian hotel sector, with steady growth from established players and exceptional performance from Chalet Hotels and Ventive Hospitality.

While margin pressure affected IHCL, the overall sector outlook remains strong, supported by rising corporate travel, premium leisure demand, and upcoming seasonal tailwinds. The industry is well-positioned for a robust Q3, likely to deliver the strongest quarterly performance of the fiscal year.