Hotel Stocks Hold Key Supports; Fundamentals Signal a Strong Q3 FY2026 Outlook

Hotel stocks are currently consolidating near crucial support zones, indicating a period of healthy stabilisation rather than a breakdown in trend structure. Key hospitality names such as Indian Hotels, ITC Hotels, Chalet Hotels, and Lemon Tree Hotels are witnessing price action that reflects accumulation near prior demand zones, supported by flattening moving averages often a precursor to a fundamental or earnings-led upmove.

Technical Charts Show Stability Near Demand Zones

Across the major hotel counters, prices are holding firm near well-established support areas:

• Indian Hotels is consolidating within a strong demand band, with the stock stabilising despite recent volatility.
• ITC Hotels shows price action flattening near its support cluster, suggesting selling pressure has eased.
• Chalet Hotels continues to defend its base structure after a corrective phase.
• Lemon Tree Hotels is trading near the lower end of its consolidation range, indicating potential accumulation.

The chart patterns reflect a market that is digesting past gains, waiting for upcoming triggers, and positioning for the seasonally strongest quarter.

Improving Industry Fundamentals Reinforce the Technical Setup

This technical stability coincides with positive sector fundamentals, as highlighted in the HVS ANAROCK October–November 2025 report:

Key Data Highlights

• ARR (Average Room Rates) rose 10–12% YoY in October 2025, led by:
  • Strong corporate travel recovery
  • Healthy MICE (Meetings, Incentives, Conferences & Exhibitions) demand
  • An extended Diwali travel window
• Occupancy levels edged higher YoY, despite expected seasonal fluctuations.
• RevPAR (Revenue Per Available Room) grew 12–14% YoY, demonstrating sustained pricing power across categories.

These metrics highlight robust demand visibility as the industry enters its busiest period.

Q3 FY2026: The Strongest Seasonal Quarter for Hotels

The December quarter is historically the peak season for the hospitality sector, supported by:

• Destination and domestic weddings
• Holiday travel and leisure tourism
• Corporate conferences, annual events, and MICE bookings

This seasonal strength explains why hotel stocks are holding supports despite noise from factors like airline disruptions, air-quality concerns, or short-term volatility in travel sentiment.

Investors appear to be looking beyond temporary headwinds, focusing instead on earnings resilience and forward bookings.

Market Outlook: Earnings Recovery Expected in Q3 FY2026

The combination of solid technical support and strengthening fundamentals suggests that the hotel sector remains well-positioned for an earnings rebound. Price stability near key support zones, coupled with YoY growth across ARR, occupancies, and RevPAR, indicates the sector is gearing up for a favourable Q3 FY2026 performance.

Key Takeaways

• Technical bases across hotel stocks remain intact.
• Fundamental metrics show momentum in rates and occupancies.
• Seasonal strength is expected to lift Q3 earnings.
• Sector outlook remains positive despite short-term noise.
  
  

Overall, hotel stocks appear poised for recovery and upside potential, supported by both chart structure and robust industry demand trends.