ITC Hotels reported a 15% year-on-year revenue growth in Q1 FY27, overcoming early-quarter geopolitical pressure. The company plans to reach 22,500 keys by 2031 while focusing on an asset-light expansion model.
ITC Hotels Limited (ITCHL) delivered a strong performance for the first quarter of the 2027 fiscal year. The company recorded a 15% increase in revenue compared to the same period last year. This growth was notable as it occurred despite a temporary slowdown in foreign tourist arrivals during April caused by geopolitical tensions in West Asia. By May and June, the company saw a swift recovery in demand.
Operational Performance and Pricing
Occupancy levels in owned and leased properties reached 76% for the quarter, an improvement of approximately 300 basis points year-over-year. The company also benefited from pricing power, as average room rates rose by 4%. Combined, these factors led to an 8% increase in Revenue Per Available Room (RevPAR), a key metric used to measure hotel performance. Additionally, the company's residential flat sales contributed Rs 38 crore to the quarterly results.
Profitability and Strategic Expansion
Profitability metrics showed improvement, with EBITDA margins expanding by 130 basis points year-over-year. The core hotel business specifically saw a margin gain of 125 basis points. Strong earnings growth of 35% was supported by stable depreciation costs and higher other income.
Looking ahead, ITC Hotels aims to grow its total inventory from approximately 14,300 keys to 22,500 keys by 2031, representing a 55% increase. A central part of this strategy is moving toward an asset-light model, where the company manages hotels owned by other parties. The proportion of managed keys is expected to rise from 60% to 67% of the total portfolio, which helps reduce the need for heavy capital spending on building new properties.
Inorganic Growth and Financial Position
The company is actively using its cash reserves to acquire existing properties. It recently acquired GHK Hospitality & Infrastructure Limited, which owns the Welcomhotel in Ahmedabad, for an enterprise value of Rs 155 crore, with integration expected by the second quarter of FY27. Furthermore, the company is upgrading the Kumarakom Resort in Kerala, which is scheduled for a relaunch in Q3 FY27. As of March 2026, the company maintained a healthy balance sheet with Rs 1,600 crore in cash and cash equivalents.
Investors may monitor the progress of these ongoing acquisitions and the pace at which the company executes its plan to expand its hotel inventory. The final impact on long-term earnings will depend on demand trends in the travel sector and the company's ability to maintain occupancy and room rates as it adds new capacity.