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ICICI Securities Report
Hotel stocks are likely to be in focus after domestic brokerage firm ICICI Securities turned constructive on the sector, citing a strong rebound in demand, improving occupancy levels and a positive medium-term outlook driven by structural tailwinds.
According to HVS Anarock's latest report, the Indian hospitality sector witnessed a sharp recovery in May 2026, with industry RevPAR (revenue per available room) rising over 20% YoY, supported by a 10% increase in average room rates (ARR) and a 700 basis point improvement in occupancy levels, albeit on a low base of May'25 where regional geopolitical tensions had impacted demand.
The brokerage also highlighted that with Jun'26 seeing decent demand traction, it estimates that same-store industry RevPAR for Q1 FY27 (Apr–Jun'26) may grow between 8–12% YoY and allay concerns of a weak start to FY27.
The brokerage maintains its assumptions of a highsingle-digit ARR CAGR of 6–8% across hotels over FY26–29E, barring any extended geopolitical impact on demand, and expect the sector to demonstrate resilience.
\New asset additions/completions remain key for companies to deliver an Ebitda compound annual growth rate of 15–20% over FY26–29E.
ICICI Securities reiterates its Buy rating on Indian Hotels, ITC Hotels, Leela Palaces, Chalet Hotels, Lemon Tree Hotels and Brigade Hotels.
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