Lemon Tree Hotels: Occupancy at 76.1%,11,930 Keys Pipeline

LEMONTREE Lemon Tree Hotels operates in the value-for-money and midscale segment, targeting business and leisure travellers across domestic and select international markets. It had 138 operational hotels with 12,131 rooms across more than 80 cities as of the September 2026 quarter. India’s domestic travel and tourism market is projected to grow from $254 billion in 2024 to $523 billion by 2034. What happened: In Q2FY27, occupancy rose to 76.1% from 69.8% a year earlier. Gross average room rate grew 8.1% to Rs 6,751. RevPar grew 18% to Rs 5,137. Revenue from operations grew 18% to Rs 361.37 crore. Net profit grew 90.5% year on year on strong domestic leisure and business travel demand. Why it matters: Lemon Tree had the highest occupancy at 76.1% among the four chains, well above Chalet at 64.2% and Leela at 69%. The 90.5% net profit growth, the fastest of the three mid-cap chains, reflects operating leverage on higher volumes. ROE of 19.2% exceeds The Indian Hotels Company at 15.4% and Leela Palaces at 8.2%. What I am watching: Lemon Tree has 147 hotels under development with 11,930 rooms, a mix of owned and managed properties. That pipeline nearly doubles the current room count of 12,131. The balance between managed and owned additions will determine how capital-efficient this expansion proves over the next three to four years. My stance: Lemon Tree trades at 34.9 times consolidated P/E, a 44% discount to The Indian Hotels Company at 62.9 times. Over five years it has traded between 55.4 and 165.8 times, putting the current multiple near a multi-year low. The occupancy and ROE combination is the strongest among the three mid-cap peers here. I do not hold a position in Lemon Tree Hotels at the time of writing. This is not investment advice.