INDIGO

Turbulence Fails to Dent Hotel Up‑Cycle Momentum

’s two‑week operational disruption—triggered by new FDTL norms and acute pilot shortages—caused widespread flight cancellations and a temporary spike in airfares. Yet the hotel sector saw only marginal demand impact. With IndiGo restoring 90–92% of operations by December 12 and other airlines adding capacity, the broader travel ecosystem is normalising quickly. The hotel industry remains firmly in an up‑cycle, supported by strong room rates, seasonal demand, and structural tailwinds. IndiGo, with ~65% market share, saw peak cancellations of ~1,500 flights per day and ~5,000+ cancellations over 10 days. The FDTL-driven crew shortage forced many passengers to postpone or cancel travel. However, by December 12, operations recovered to 2,050+ flights—over 90% of normal levels. Despite travel disruptions, hotel cancellations were limited. Extended stays from stranded passengers offset lost bookings. Many travellers shifted to road transport, preserving leisure and business travel demand. Wedding season—backed by advance payments—remained unaffected. Q3 is seasonally the best quarter, with branded hotels reaching ~80% occupancy. Analysts expect high single‑digit to early double‑digit revenue growth for hotel companies. Occupancies may see a mild dip, but room rates remain firm, driving profitability. The hotel up‑cycle that began post‑COVID continues. Rising incomes, improved connectivity, new tourism themes (spiritual, adventure, heritage), and government infrastructure push are driving double‑digit demand growth. Supply additions lag due to long gestation periods; meaningful new capacity arrives only from FY2029 onward—supporting sustained pricing power. Earnings estimates remain unchanged given minimal disruption impact. The medium‑term outlook stays positive. Preferred stocks: , , and .