New Delhi: Lemon Tree Hotels posted a healthy improvement in its December quarter performance, riding on sustained demand in the domestic hospitality market and firm pricing across segments.
For Q3 FY26, the company reported a strong year-on-year increase in revenue, supported by improved occupancy and growth in average room rates. Management said blended occupancy levels remained elevated during the quarter, driven by steady corporate travel, weddings, MICE (meetings, incentives, conferences and exhibitions) activity and domestic leisure demand.
Operating performance strengthened during the period, with EBITDA margins expanding on the back of operating leverage and better cost absorption. Profit after tax rose sharply compared to the year-ago quarter, reflecting higher revenue per available room (RevPAR) and disciplined cost management.
The company’s asset-light strategy continued to gain traction, with a growing share of inventory under management and franchise models. Management highlighted that this approach enhances return ratios while limiting capital expenditure commitments.
During the quarter, Lemon Tree added new inventory across multiple cities, further expanding its pan-India footprint. The company said it remains focused on scaling up in metro markets, tier-II cities and emerging business hubs, where demand visibility remains strong.
Commenting on the outlook, management said the demand environment remains favourable heading into the next quarter, supported by a healthy pipeline of corporate bookings and continued traction in the weddings and events segment. The company expects room rates to remain firm amid constrained supply additions in key urban markets.
The Indian hospitality sector is currently benefiting from a structural recovery, improved travel sentiment and limited new supply in premium locations, which is aiding pricing power for organised players.
Shares of Lemon Tree Hotels have seen increased investor interest amid improved financial performance and a clear growth roadmap anchored in an asset-light expansion model.
With occupancy levels stabilising at elevated levels and ARR trends holding firm, the company appears well-positioned to sustain earnings momentum in the near term.