This article highlights the expansion plans, financial strength, and growth strategy of Leela Palaces Hotels & Resorts in India’s luxury hospitality sector.
With nine new locations, Leela Palaces Hotels is increasing its growth in the upscale hospitality sector in India. By FY30, the company hopes to have 24 hotels and increase member loyalty through private clubs thanks to its strong financial position and growing demand.
Leela Palaces Hotels Expansion Strategy
Leela Palaces Hotels and Resorts, based in Mumbai, is counting on a long runway for upscale travel while keeping strict control over brand standards and important assets as it speeds up its expansion throughout India’s luxury hospitality market.
Nine new properties covering nature, heritage, spiritual, mountain, and urban areas are planned by the firm, along with branded homes and exclusive clubs.
Strong Growth Outlook in Luxury Travel
“Luxury travel in India is a multi-decade story; we have around 4,000 of the approximately 30,000 luxury hotel rooms in India. We have a long luxury runway ahead thanks to rising household incomes, an increasing number of wealthy tourists, and a completely untapped luxury hotel industry, Anuraag Bhatnagar, CEO of Leela Palaces, told Mint.
He claimed that the business is in a strong financial position to finance this growth. “In recent quarters, we reported 62% free cash flow conversion and 49% Ebitda margins. We have the resources to finance the development pipeline and significant acquisitions, including a Dubai property that will be completely rebranded under Leela once the purchase closes, thanks to our strong cash flows and internal accruals,” he continued.
About EBITDA and Company Background
Earnings before interest, taxes, depreciation, and amortization, or EBITDA, is a crucial indicator of a business’s operational success. Founded in 1986, The Leela is one of the oldest luxury hotel brands in the nation, competing with the high-end offerings of Oberoi and Taj.
The company was taken over by alternative asset management firm Brookfield in 2019, floated in 2025, and later changed its name to Leela Palaces Hotels & Resorts Ltd. The company’s shares closed 2.1% down on Friday at ₹407.05 per on the BSE.
Post-Pandemic Demand and Travel Trends
Bhatnagar noted that there is no turning back now that the pandemic has increased demand for upscale hospitality in India. Additionally, some outbound travel has returned to India due to geopolitical problems in West Asia, which has increased demand for wildlife, heritage, and mountain attractions. “We anticipate seeing that in Q2 of FY27 and later.
We anticipate strong traction in Q2 (July-September 2026) because we have witnessed postponements and deferrals of events scheduled for March as well to later months,” he continued.
🏨 Leela Luxury Expansion Highlights
- Target: 24 hotels by FY30
- Current Hotels: 15 properties
- New Projects: 9 upcoming properties
- Focus Areas: Heritage, nature, spiritual, urban
- Revenue Growth: Strong financial performance
New Property Locations and Development Plan
Six of the new properties owned by Leela Palaces are in Ranthambore, Bandhavgarh, Agra, Ayodhya, Srinagar, Sikkim, Coorg, and Jaisalmer, while three are under management contracts. We have complete funding for our current development pipeline, which allows us to continue ongoing initiatives and assess new opportunities as they present themselves. The supply in our micro marketplaces is still modest, despite the double-digit growth in demand for luxury goods,” he stated.
Leela plans to run 24 hotels by FY30, up from the current 15, while keeping owned assets and management agreements about equal. According to Bhatnagar, this approach will enable the business to grow.
Financial Performance and Revenue Growth
Leela Palaces recorded revenue of ₹318.4 for the nine months ending December 31, 2025, a 21.2% increase from ₹262.7 crore in the same period last year. Compared to a loss of ₹1.8 crore during the same time previous year, profit after tax was ₹18.4 crore.
With about 62% of our topline revenue going into free cash flow, we have been operating at an EBITDA margin of 48 to 49%. We have sufficient capacity on the balance sheet to finance our current development pipeline while also assessing fresh prospects because our net debt-to-EBITDA ratio is around 1.7 times, according to Bhatnagar.
Luxury Travel Market Growth in India
According to him, the company is expanding into “nature-centric, heritage-driven, spiritual and allow for multi-generational travel experiences” locales, which are increasingly influencing luxury travel. He said, “We are also developing recurring revenue streams and deepening loyalty among premium travelers by expanding members-only clubs to Delhi, Chennai, and Mumbai.”
Leela has significant pricing power. Bhatnagar stated in its Q3 (October-December 2025) call in January that the company had outperformed its peers in the luxury sector, primarily due to a significant increase in room prices. While operational Ebitda, or core profit, increased 23%, revenue collected per available room, or RevPAR, increased 20% from the previous year.
A 17% rise in average hotel rates was the key driver of the expansion, demonstrating the company’s ability to raise prices without sacrificing robust demand. “Non-room revenue streams are also growing increasingly important, with food and beverage providing 35-36%, wellness 4-5%, and events 20-23% of overall revenue.”
Industry Outlook and Future Opportunities
With an estimated 30,000 rooms in this category, India’s luxury hotel business is still underdeveloped. According to data from hospitality consultancy Horwath HTL, there are currently roughly 200,000 hotel rooms in India overall, and by FY30, this number is predicted to rise to 300,000.
Over the next five years, it is anticipated that the number of households that can afford luxury travel would increase from 70 million to over 200 million. Leela has a substantial growth opportunity due to the mix of growing domestic wealth, improved infrastructure, and a limited supply of luxury goods, he continued.
Market Data and Occupancy Trends
According to Horwath HTL’s India Market Report 2025, average daily room rates in luxury hotels were ₹13,379 per night, which was 9% more than in 2024. Compared to upscale and midscale hotels, which had occupancies ranging from 56 to 65%, these hotels had a year-round occupancy of 68%.
According to the survey, 16% of future hotel rooms would fall into the luxury category, which is about equivalent to 15% in 2025. Seven of its nine planned properties will open in Ayodhya, Ranthambore, Gangtok, Srinagar, Bandhavgarh, Agra, and Mumbai over the course of the next three years.
Two will function under management agreements, and five will be owned. “The ecosystem we have created around luxury travel is our moat. Together, experiences, homes, wellness facilities, and members-only clubs offer our visitors long-term value and a unique experience,” he continued.
Disclaimer: This article is for informational purposes only. Financial data and business outlook may change. Always refer to official sources for the latest updates.
