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Elara sees hotel RevPAR up 11-13% in Q2 FY27; prefers Lemon Tree and ITC Hotels in the near term
Elara Capital expects hotel RevPAR to grow 11-13 per cent year-on-year in Q2 FY27, on 200-400 basis points higher occupancy and 6-7 per cent higher average room rates. It prefers Lemon Tree Hotels and ITC Hotels in the short term.
The numbers
Figures from Business Today,
| August 2026 domestic air passenger traffic: | 12.1 million |
|---|---|
| August 2026 domestic air traffic decline YoY: | 6.3 per cent |
Why it matters to operators and investors
With Elara expecting occupancy up 200-400 bps and room rates up 6-7% despite only five auspicious wedding days and seven dry days, operators should hold rate discipline and fill the gaps with corporate and leisure demand rather than discounting, while watching August's 6.3% YoY drop in domestic air traffic to 12.1 million.
What to watch next
- Reported Q2 FY27 RevPAR growth from Lemon Tree and ITC Hotels against the 11-13% band
- Occupancy change versus the 200-400 bps expected, and average room rate growth versus 6-7%
- September domestic air traffic following the 6.3% YoY August decline to 12.1 million
- Management comments on wedding-season bookings and banqueting demand after only five auspicious days
- Share price moves in Lemon Tree and ITC Hotels around results relative to the broader hotel group
Likely next moves
Our read of what comes next — analysis, not reported by the source.
- Lemon Tree is likely to report Q2 FY27 RevPAR growth within or near Elara's 11-13% band and to point to rate discipline and higher occupancy as the drivers.
- ITC Hotels is likely to frame the quarter as rate-led, with management stressing premium demand over the thin wedding calendar.
- Hotel managements may play down the August air traffic decline on earnings calls and point to corporate and leisure demand as the better guide to room nights.
- Other brokerages may follow Elara in favouring Lemon Tree and ITC Hotels if early results confirm occupancy gains of 200-400 bps.
- Expect listed hotel chains to lean on average room rate growth in their commentary, since the wedding calendar gave little help to banqueting and event revenue.
The source
Published
First seen