Chalet Hotels , a prominent player in the Indian hospitality sector, is optimistic about its performance in the latter half of the financial year, despite facing headwinds in the second quarter. Sanjay Sethi, the company's Managing Director and CEO, shared insights on the company's outlook and industry trends in a recent statement.

Occupancy Expectations and Q2 Challenges

Sethi expressed confidence in achieving occupancy rates in the high 70s during the second half of the financial year. This projection comes despite the challenges faced in the second quarter, primarily attributed to monsoons across Indian cities. The ability to maintain high occupancy rates in the face of seasonal challenges underscores the company's resilience and strong market position.

GST Impact and Industry Tailwinds

The recent GST rate rationalization is viewed positively by Chalet Hotels, with Sethi suggesting it could provide tailwinds for the hotel industry. The new tax structure is expected to put more money in consumers' pockets, potentially boosting demand for hospitality services.

Minimal Impact of New GST Rates

The introduction of a 5% GST rate for hotel rooms priced below Rs 7,500 is anticipated to have a limited impact on Chalet Hotels. Sethi revealed that only a single-digit percentage of the company's room nights are sold below this threshold, indicating that the bulk of their inventory is positioned in higher price brackets.

Pricing Strategy

In light of the new GST structure, Sethi dismissed any plans to reprice rooms to take advantage of the lower tax bracket. This stance suggests confidence in the company's current pricing strategy and target market positioning.

Advocacy for Further GST Reforms

Sethi advocated for additional changes to the GST structure for the hospitality sector:

1. Reversing the withdrawal of Input Tax Credit for rooms under Rs 7,500
2. Raising the threshold for the lower GST rate to Rs 12,000
3. Linking the threshold to the Consumer Price Index for future adjustments

These proposals aim to further support the industry and potentially improve profitability for hotel operators.

Future Growth Projections

Looking ahead, Chalet Hotels projects robust growth in key performance metrics:

• Double-digit RevPAR (Revenue Per Available Room) growth for the coming years
• Cost growth expected to be contained at 5.50-6.00%
• The combination of strong RevPAR growth and controlled costs is anticipated to allow the industry to continue expanding profit margins

Market Performance

Despite the optimistic outlook, Chalet Hotels' shares closed 2.16% lower at Rs 1,017.80 on the NSE. This movement may reflect broader market conditions or investor sentiment at the time of the announcement.

In conclusion, Chalet Hotels remains bullish on its prospects, banking on high occupancy rates, favorable industry trends, and strategic positioning in the market. The company's focus on high-end inventory and its proactive stance on industry reforms indicate a clear strategy for navigating the evolving landscape of the Indian hospitality sector.

Chalet Hotels Limited , a leading hospitality company, has announced robust financial results for the first quarter of fiscal year 2026, ending June 30, 2025. The company reported significant growth across key financial metrics, driven by strong performance in its hospitality and real estate segments.

Financial Highlights

• Total revenue surged by 146% year-over-year to ₹9,083.00 million
• EBITDA (Earnings Before Interest, Tax, Depreciation, and Amortization) increased by 150% to ₹3,711.00 million
• Net profit saw a substantial rise of 235% to ₹2,031.00 million
• Earnings per share (EPS) grew to ₹9.30, compared to ₹2.79 in Q1 FY25

Segment Performance

Hospitality Segment

The hospitality segment continued to be a strong contributor to Chalet Hotels' growth:

• Revenue from the hospitality segment increased by 18% to ₹3,856.00 million
• EBITDA from hospitality operations grew by 20% to ₹1,608.00 million
• Average Daily Rate (ADR) improved by 17% to ₹12,207.00
• Revenue Per Available Room (RevPAR) increased by 9.6% to ₹8,059.00

Real Estate Segment

The company's real estate segment saw significant traction:

• Recognized revenue of ₹4,391.00 million from its residential project in Bengaluru
• Handed over 95 units at The Vivarea, Koramangala, Bengaluru

Rental and Annuity Business

The rental and annuity business also showed strong growth:

• Revenue more than doubled, increasing by 106% to ₹732.00 million
• EBITDA from this segment grew by 130% to ₹608.00 million

Operational Updates

Chalet Hotels continued to expand its portfolio and enhance its offerings:

• Added 121 rooms at Bengaluru Marriott Hotel Whitefield
• Operationalized 44 rooms and a banquet at The Dukes Retreat, Khandala
• Achieved a total operational inventory of 3,351 keys across 11 hotels

Corporate Developments

The company announced key management changes:

• Dr. Sanjay Sethi, current Managing Director & CEO, will retire from executive responsibilities on January 31, 2026
• Mr. Shwetank Singh has been appointed as the Managing Director & CEO Designate, effective February 1, 2026
• Dr. Sethi will continue as a Non-Executive, Non-Independent Director after his retirement

Recognition

Chalet Hotels maintained its position as an employer of choice:

• Ranked 11th in the Great Place To Work® survey
• Received this recognition for the 6th consecutive year

Commenting on the results, Dr. Sanjay Sethi, Managing Director & CEO of Chalet Hotels, said, "Despite the geopolitical headwinds across India and West Asia, we've once again delivered a strong quarterly performance — a reflection of our team's unwavering commitment to disciplined execution, guest-centricity, and long-term value creation."

The company's focus on expanding its portfolio, diversifying revenue streams, and maintaining operational excellence has contributed to its strong performance in Q1 FY26. With a robust pipeline of projects and a clear succession plan in place, Chalet Hotels appears well-positioned for continued growth in the coming quarters.