ITC Hotels reported a profit increase of more than 50%, with higher occupancy and higher room rates. The results match Indian Hotels’ record quarter earlier this month: demand for luxury hotels remains strong
ITC Hotels, demerged from ITC last year, reported consolidated net profit of ₹202.65 crore for the September quarter, up 52% from ₹133 crore a year earlier. Revenue from operations rose 26% to ₹1,054 crore. The shares rose as much as 8% on Monday.
The growth came from both more guests and higher prices. Occupancy at its owned hotels rose 4.8 percentage points to 76%, and average daily room rates rose 14%. Together, revenue per available room (RevPAR), the industry’s main measure of performance, grew 21% to about ₹9,700. ITC Hotels said its RevPAR was 44% higher than the industry average for comparable hotels.
Room revenue rose 22% to ₹501 crore. Margins improved as well: EBITDA excluding branded residences rose 28% to ₹314 crore, and the margin widened by 263 basis points to 32%. As with any hotel company, most costs are fixed, so higher occupancy and higher rates lead to faster profit growth.
What drove demand
ITC Hotels pointed to business travel and large events, including conferences and meetings, as key drivers. It said the BRICS India 2026 summit, hosted by India this year, gave business travel a notable boost. Weddings and leisure travel by wealthier households also held up.
The company noted one area of concern: domestic air passenger traffic slowed in August and September as higher fuel prices pushed up airfares. That could eventually reduce leisure travel, particularly in the mid-market. Management remains positive about the second half, which includes the wedding season, the main winter tourist months and the festive period.
Expanding
ITC Hotels is expanding mostly through management contracts, under which it runs hotels owned by others and earns fees. Management and operating fees rose 25% to ₹43 crore. In the first half, it signed 20 new properties adding about 1,600 rooms, and its total pipeline now exceeds 8,200 rooms across 84 hotels.
ITC Ratnadipa, its large hotel in Colombo, performed well. It made a positive EBITDA in both the quarter and the first half, and its RevPAR was 1.8 times the FY25 level.
ITC Hotels’ results add to a clear pattern this earnings season. Indian Hotels reported its 18th consecutive record quarter, with occupancy at 82%. Luxury hotels, premium travel, high-end property and premium consumer goods are doing well, while companies selling to mass-market consumers report weaker demand. Vishal Mega Mart’s slowdown and flat tea volumes at Tata Consumer show the other side.
For hotel investors, the strength in luxury demand is good news. The risk is that it depends on a relatively small group of affluent consumers and on corporate spending, both of which would weaken quickly if the economy or financial markets deteriorated.
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