Chalet Hotels expects occupancy rates to reach the “high 70s” in the second half of the financial year, said Sanjay Sethi, the company’s MD & CEO.
“Quarter two has had its own challenges. Monsoons have been a bit of a downer in many of the cities across India. But, H2 looks very, very bullish. Once we get into the H2, we expect occupancy rates heading back to the high 70s, as we’ve done in the past,” he noted.
Sethi added that the recent rationalisation of GST (Goods and Services Tax) rates, which puts more disposable income in the hands of consumers, is giving fresh “tailwinds” to the fast-growing hospitality sector. At the same time, he emphasized the need for deeper GST reforms to ensure sustainable long-term growth.
“This sort of propels and adds to the tailwinds that the hotel industry has had over the last few quarters. It covers all the aspects of Viksit Bharat and Sabka Vikas. What has changed is that the additional liquidity in the hands of the consumers will add to the tailwinds,” he said.
The revised 5% GST rate on hotel room tariffs under ₹7,500, without Input Tax Credit (ITC), will have little effect on Chalet Hotels, the CEO said.
“A very small part of Chalet Hotel’s room nights are sold below Rs 7,500. It’s in single-digit percentage numbers,” he explained. Sethi firmly dismissed any suggestion that the company might reprice rooms to take advantage of the lower tax bracket, stating, “Not at all. We are a forward-looking company; we’d like to work on growing the business, not working in a negative fashion.”
He maintained that the removal of Input Tax Credit (ITC) on room tariffs below ₹7,500 ought to be rolled back, further stressing that the ₹7,500 threshold itself is no longer relevant.
“I think the right number there would be about Rs 12,000. To end this debate forever for the future, I think we should link this cutoff price to the CPI (Consumer Price Index) so that we don’t have to discuss this ever again, what the right number should be,” he underscored. Sethi remains confident about the industry’s trajectory, projecting double-digit RevPAR growth for the next few years.
“We continue to hold the double-digit RevPAR growth story for India for the coming few years. And that’s a good number to have. Costs are growing at about 5.5-6%. So, we should continue as an industry to add to the margins that we deliver,” he said.
Overall, Chalet Hotels remains optimistic about its performance in the second half of the year, backed by rising occupancy levels and supportive policy changes. However, the company continues to urge structural reforms in the GST framework to unlock the full growth potential of India’s hospitality sector.
