Hotels & Resorts Industry Playbook
Part of the Consumer Services sector This playbook covers the Hotels & Resorts subindustry within the Consumer Services sector. It provides a focused framewo...
Part of the Consumer Services sector
Industry Overview
This playbook covers the Hotels & Resorts sub-industry within the Consumer Services sector. It provides a focused framework for analysing and valuing companies in this specific segment of the Indian market.
What you will learn
- Industry Overview: How Hotels & Resorts companies operate — business models, revenue drivers, and key players in India
- Key Metrics: The 4-5 financial metrics that matter most for evaluating Hotels & Resorts companies
- Competitive Landscape: Market structure, entry barriers, pricing power, and moat analysis for Hotels & Resorts
- Risks & Red Flags: What can go wrong — regulatory, cyclical, and company-specific risks in Hotels & Resorts
- Valuation Framework: How to value Hotels & Resorts companies — appropriate multiples, benchmarks, and peer comparison
Quick navigation
| Lesson | Focus |
|---|---|
| Industry Overview | How Hotels & Resorts companies operate — business models, re... |
| Key Metrics | The 4-5 financial metrics that matter most for evaluating Ho... |
| Competitive Landscape | Market structure, entry barriers, pricing power, and moat an... |
| Risks & Red Flags | What can go wrong — regulatory, cyclical, and company-specif... |
| Valuation Framework | How to value Hotels & Resorts companies — appropriate multip... |
Start here
Begin with the Industry Overview to understand the basic business model, then use Key Metrics to build your screening criteria.
1. Hotels & Resorts — Industry Overview
Hotels are asset-heavy but RevPAR-driven. India is in a structural upcycle — supply is tight, demand is booming.
What you will learn
How Indian hotel companies make money, the asset-heavy vs asset-light debate, and why the current cycle is different.
Business model
Operating models
| Model | How it works | Capital | Margin | Example |
|---|---|---|---|---|
| Owned & operated | Company owns hotel, runs it | Very high | High when occupancy > 60% | Indian Hotels (Taj), EIH (Oberoi) |
| Managed | Third party owns; branded operator manages | Zero capital | Fee-based (3-5% of revenue + incentive) | Marriott, Hyatt in India |
| Franchised | Operator uses brand name; runs independently | Zero for franchisor | Royalty (5-8% of revenue) | Lemon Tree expanding via franchise |
| Leased | Operator leases property; pays fixed rent | Medium | Variable — depends on RevPAR vs rent | Some OYO properties |
Asset-light = higher ROCE but lower control
Indian Hotels (IHCL) is rapidly shifting to asset-light (managed + franchised). This improves ROCE from 8-10% (owned) to 25-30% (managed). Lemon Tree is also franchising aggressively for mid-market.
Key players in India
| Company | Brands | Rooms (owned + managed) | Model mix | Position |
|---|---|---|---|---|
| Indian Hotels (IHCL) | Taj, Vivanta, Ginger, SeleQtions | 28,000+ keys | 50% owned, 50% asset-light | Premium/luxury leader |
| EIH (Oberoi) | Oberoi, Trident | 5,000+ keys | Mostly owned | Ultra-luxury; capital-heavy |
| Lemon Tree Hotels | Lemon Tree, Keys | 10,000+ keys | Mix owned + managed | Mid-market leader |
| Chalet Hotels | Marriott-branded properties | 3,500+ keys | Owns; Marriott-managed | Luxury urban; developer |
| OYO (unlisted) | OYO, Townhouse, Palette | 150,000+ rooms (aggregated) | Franchise/revenue share | Budget; controversial |
Market structure
| Segment | Supply share | Demand driver | Key operators |
|---|---|---|---|
| Luxury (ARR > ₹15,000) | 15% | Corporate, MICE, foreign tourists | IHCL, EIH, Leela, ITC Hotels |
| Upper upscale (₹8-15,000) | 20% | Business travel, weddings | Marriott, Hyatt, IHCL Vivanta |
| Mid-market (₹4-8,000) | 30% | Domestic leisure, small corporate | Lemon Tree, Ginger, Holiday Inn |
| Budget (< ₹4,000) | 35% | Mass leisure, pilgrim | OYO, Treebo, local independents |
Growth drivers (India)
| Factor | Impact |
|---|---|
| Supply-demand gap | India has 0.5 rooms per 1,000 people vs 4+ in US; massive under-supply |
| Corporate travel recovery | Post-COVID MICE and business travel booming |
| Domestic tourism | 200 Cr+ domestic tourist trips annually; growing 15%+ |
| Wedding destination demand | ₹5 lakh Cr wedding market shifting to hotels/resorts |
| No significant new supply (3 years) | COVID stopped construction; new hotels take 4-5 years to build |
| G20 / international events | Drove upgrades; foreign tourist arrivals recovering |
Indian context
🗣️
"India mein rooms ki supply itni kam hai ki occupancy 70%+ chal rahi hai. Naye hotels banane mein 5 saal lagte hain. Tab tak jo existing players hain unke liye yeh golden period hai."
What to check next
- Explore company-level data on the Screener
- Read the parent sector playbook
- View AI research insights for live analysis
2. Hotels & Resorts — Key Metrics
RevPAR is THE metric. It combines occupancy and rate into one number. Watch it like a hawk. The 5 metrics that drive hotel valuations — RevPAR, occupancy, AR...
Full sector playbook is a Pro feature
Sign up to continue learning — unlock the full path, in-depth lessons, projects, and every tool on the platform.
3. Hotels & Resorts — Competitive Landscape
IHCL (Taj) has reinvented itself — from a bloated PSUlike entity to India’s most admired brand. That’s the moat. Who dominates Indian hospitality, how brand...
Full sector playbook is a Pro feature
Sign up to continue learning — unlock the full path, in-depth lessons, projects, and every tool on the platform.
4. Hotels & Resorts — Risks & Red Flags
Hotels are cyclical beasts. In a downcycle, fixed costs remain while revenue falls 4050%. Leverage kills. Cyclicality, supply risk, pandemic vulnerability, a...
Full sector playbook is a Pro feature
Sign up to continue learning — unlock the full path, in-depth lessons, projects, and every tool on the platform.
5. Hotels & Resorts — Valuation Framework
Hotels are valued on EV/EBITDA and EV per key. In India, also add the land value beneath the hotel. How to value hotel companies using EV/EBITDA, EV per key,...
Full sector playbook is a Pro feature
Sign up to continue learning — unlock the full path, in-depth lessons, projects, and every tool on the platform.