Chalet Hotels sees revenue growth improving as domestic demand holds up

India’s hotel market is showing a sharp split screen: domestic travelers are keeping premium rooms filled even as foreign cancellations tied to the Gulf war weigh on international demand. Chalet Hotels expects revenue growth, excluding its residential business, to improve in the April-June quarter to the high-single-digit to low-double-digit range, up from 6% in the previous quarter.

That would mark a step up from the slowdown Chalet saw after core revenue growth had reached 23% in the October-December period. Shwetank Singh, the company’s chief executive and managing director, said travelers, mainly foreigners, canceled bookings worth 600 million rupees, or about $6.4 million, between March and April, although arrivals have started to recover.

The broader demand picture is less uniform. Domestic leisure travel remains strong, destination weddings have shifted from the Middle East to India, and Prime Minister Narendra Modi has urged Indians to vacation at home to support the local economy and reduce foreign-exchange outflows. At the same time, corporate travel is softer as firms tighten spending on travel and marketing while oil, freight and insurance costs rise in the conflict’s aftermath.

Chalet has tried to protect margins without signaling panic. The company said it has offered more affordable room rates to some companies that were previously priced out, while avoiding public price cuts. It has also cut discretionary spending, stopped backfilling some vacancies created by normal attrition, and switched off lights on vacant hotel floors in Bengaluru and Hyderabad to save power and utility costs. Even with those steps, management has said growth plans remain on track.

The company’s footprint helps explain why its results are watched closely as a barometer for premium travel demand in India. Chalet, part of the K Raheja Corp group, has 11 fully operational hotels with 3,389 keys and about 2.4 million square feet of commercial space near its hospitality assets, spanning Mumbai, Hyderabad, Bengaluru, Pune, Khandala, Delhi-NCR, Rishikesh and Goa, which is still coming soon.

The sector backdrop is supportive, even if not immune to shocks. India Ratings and Research said hotel demand and supply should both grow 10% to 15% in this financial year, while ICRA’s March 2026 outlook projected industry revenue growth of 9% to 12% in FY26, premium-hotel occupancy of 72% to 74% and average room rates of about 8,200 to 8,500 rupees. Chalet later reported FY26 consolidated revenue of 28.124 billion rupees, up 60% from a year earlier, underscoring how much resilient Indian consumption can offset a global disruption, at least for now.