Chalet Hotels lifts hospitality margin to 41.1% in Q2FY27

Chalet Hotels raised hospitality earnings before interest, tax, depreciation and amortisation (EBITDA) margin to 41.1% in Q2FY27, 110 basis points above Q2FY26, as revenue rose 8.2% to Rs 411.5 crore despite a 244-basis-point decline in portfolio occupancy to 64.2%. Average daily rate rose 11.3%, lifting revenue per available room 7.2%.

What drove Chalet Hotels’ hospitality margin expansion in Q2FY27?

Chalet Hotels’ hospitality EBITDA increased 11.2% year on year to Rs 169.1 crore in Q2FY27, outpacing the 8.2% increase in revenue to Rs 411.5 crore and lifting the margin from 40.0% to 41.1%. The 110-basis-point movement reflects EBITDA increasing faster than hospitality revenue during the quarter.

Room revenue was the largest contributor to the increase, rising 9.7% to Rs 269.4 crore from Rs 245.5 crore in Q2FY26. Food and beverage revenue rose 6.4% to Rs 116.4 crore, while other revenue increased 1.7% to Rs 25.7 crore. Room revenue accounted for Rs 23.9 crore of the Rs 31.3 crore increase in hospitality revenue.

The first-half pattern was similar. Hospitality revenue in H1FY27 rose 8.4% to Rs 830 crore, while EBITDA rose 11.1% to Rs 347.5 crore. Consequently, the H1FY27 margin reached 41.9%, compared with 40.9% in H1FY26, an increase of 101 basis points. Chalet Hotels separately identified a one-time expense write-back of Rs 3.36 crore in H1FY26 other revenue.

How did room rates offset lower Chalet Hotels occupancy?

Chalet Hotels offset lower occupancy through higher pricing: combined portfolio average daily rate, or ADR, rose 11.3% year on year to Rs 13,546 in Q2FY27, while occupancy fell to 64.2% from 66.7%. The 244-basis-point occupancy decline was more than offset in revenue per available room, or RevPAR, which rose 7.2% to Rs 8,702 from Rs 8,115.

The Mumbai Metropolitan Region, or MMR, recorded the larger occupancy reduction. MMR occupancy declined 667 basis points to 67.3%, although ADR increased 13.5% to Rs 12,555 and RevPAR still rose 3.3% to Rs 8,450. In other locations, including Hyderabad, Pune, Khandala, Bengaluru, the National Capital Region and Uttarakhand, occupancy improved 84 basis points to 61.8%, while ADR rose 8.9% to Rs 14,420 and RevPAR increased 10.4% to Rs 8,905.

The H1FY27 operating figures also remained above the previous year on pricing and RevPAR. ADR rose 9.9% to Rs 13,397, occupancy declined 185 basis points to 64.5%, and RevPAR rose 6.9% to Rs 8,642. Chalet Hotels said Q2FY27 RevPAR growth occurred despite the West Asia geopolitical situation, higher fuel prices and airfares, and rationalisation of flights on select routes.

Which Chalet Hotels hotel segments produced the highest growth?

Chalet Hotels’ resorts delivered faster RevPAR growth in Q2FY27, with RevPAR rising 33.8% to Rs 6,208, compared with a 5.4% increase to Rs 9,083 at business hotels. Resort occupancy increased 853 basis points to 41.2% from 32.6%, while resort ADR increased 6.1% to Rs 15,083. Higher resort occupancy and rates exceeded the combined portfolio’s 7.2% RevPAR growth.

Business hotels recorded a different mix of volume and pricing. Their Q2FY27 occupancy fell 385 basis points to 67.8%, but ADR increased 11.4% to Rs 13,403, supporting the 5.4% RevPAR gain. This segment includes JW Marriott Mumbai Sahar, The Westin Mumbai Powai Lake, Novotel Pune Nagar Road, The Westin Hyderabad Mindspace and Bengaluru Marriott Hotel Whitefield.

For H1FY27, resorts again outgrew business hotels on RevPAR, at 26.4% versus 5.0%. Resort occupancy reached 46.1%, up 732 basis points, and ADR was Rs 16,828, up 6.3%. The resort portfolio includes ATHIVA® Resort & Spa, Khandala, Aravali Marriott Resort & Spa, Delhi NCR, and The Westin Resort & Spa, Himalayas, Uttarakhand.

What operating-cost changes supported Chalet Hotels’ profitability?

Chalet Hotels lowered total hospitality expenses as a share of revenue to 58.9% in Q2FY27 from 60.0% in Q2FY26, alongside the 110-basis-point increase in EBITDA margin. Utilities represented 5.6% of revenue, down from 6.0%, and payroll represented 15.2%, down from 15.5%.

The staff-to-room ratio was unchanged at 0.98 times in September 2026 and September 2025. Chalet Hotels said inventory additions and newly acquired assets are intended to drive further efficiencies. The stable staffing ratio accompanied lower utilities and payroll as percentages of revenue in Q2FY27.

Chalet Hotels operated 140 keys at ATHIVA® Pulse, Navi Mumbai – Autograph Collection during Q2FY27, compared with 87 keys in Q2FY26. Separately, the company announced two ATHIVA® projects, in Hyderabad and Pune, during the quarter, taking the brand’s key count including pipeline beyond 1,200. These additions represent operating expansion rather than reported Q2FY27 hospitality revenue.

Conclusion

Chalet Hotels’ quarter combined rate-led RevPAR growth with lower expense ratios, while performance differed between the segments. Resorts generated 33.8% RevPAR growth as occupancy rose 853 basis points, whereas business hotels produced 5.4% RevPAR growth through an 11.4% ADR increase despite a 385-basis-point occupancy decline.

The next reported measures to watch are occupancy and ADR by segment, particularly whether business-hotel occupancy improves from 67.8% and whether resort occupancy sustains its rise to 41.2%. Chalet Hotels also disclosed that 168 Phase II units in its Koramangala residential project are awaiting handover in H2FY27, an event that affects consolidated year-on-year comparability because Q2FY26 included one-off residential income.