Royal Orchid Hotels Expects Upto 20% Jump In Average Room Rents In FY26, FY27
Royal Orchid Hotels' average room rents in the first half of fiscal 2025 went up to Rs 5,100, as compared to Rs 4,700 in the year-ago period, the company's CEO Amit Jaiswal said.
Royal Orchid Hotels Ltd. expects its average room rents to organically grow at about 20% in the next two fiscal years on the back of rising demand, according to the company’s Chief Financial Officer Amit Jaiswal.
Speaking to NDTV Profit, Jaiswal said that the company’s upcoming hotel will in Mumbai give a further “bump up” to its growth trajectory.
He noted that the average room rents, or ARRs, in the first half of this fiscal went up to Rs 5,100, as compared to Rs 4,700 in the first half of fiscal 2024.
“The ARR is going to grow substantially in the next two years, that is FY25-26 and FY26-27. There will be a growth of roughly 15% to 20% because there is huge demand,” the Royal Orchid Hotels CFO said.
Jaiswal revealed that the December quarter is turning out to be a “great quarter” for not just his company, but also for the hotel industry at large.
“The growth in demand in the last couple of years has been phenomenal. The economy of our country is doing well,” he said.
The top executive added that with business travel doing well, there is no reason for ARRs to not go up by at least 15%.
Royal Orchid Hotels, in April this year, signed a lease agreement with MASA Hotels to open a 300-room 5-star hotel near Terminal 2 of the Mumbai International Airport.
Jaisal said that the 15-20% growth in ARR that he projects excludes the prospects from the company’s upcoming Mumbai hotel. “That (Mumbai hotel) will bump up our ARR drastically,” he said.
The upcoming hotel will also generate over Rs 100 crore in revenue in the next financial year, which will help the company achieve its fiscal 2026 guidance of Rs 500-crore revenue and a 20% growth in the net profit.
“Next financial year, this hotel will add a lot of revenue to our group and Rs 100 crore plus (revenue) will be added. So next year, our target is achieving Rs 500 crore topline. The bottomline will grow by almost 20%. It looks very reasonably achievable,” he said.
Shares of Royal Orchid Hotels closed 1.8% higher at Rs 360.05 on the NSE on Thursday, while benchmark Nifty ended 0.1% higher at 23,750.20 points.
