Royal Orchid Hotels Ltd Management Discussions

The global economy continues to navigate a period of moderate growth despite persistent geopolitical tensions, changing trade dynamics, and evolving monetary policies across major economies. India, however, has continued to outperform many of its global peers, maintaining its position as one of the fastest-growing major economies. Economists remain optimistic about Indias medium-term growth prospects, supported by strong domestic demand, sustained public infrastructure spending, rising private investments, and a resilient services sector.

While ongoing geopolitical conflicts and global uncertainties continue to influence commodity prices, supply chains, and capital flows, Indias economic fundamentals remain robust. Government initiatives focused on infrastructure development, manufacturing, tourism, digital transformation, and ease of doing business continue to strengthen the countrys long-term growth outlook. Rising consumption, expanding service exports, and policy reforms are expected to support sustained economic expansion. These factors are likely to create a favourable environment for the hospitality industry, with increasing domestic travel, business activity, and tourism expected to drive growth during FY 2026 27 and beyond.

Based on the OECD Economic Outlook forecasts presented, India is projected to be the fastest-growing G20 economy in 2026. Despite a slight dip from 6.7% in 2025 to 6.2% in 2026, India significantly outpaces the broader G20 average, which is slowing from 3.2% to 2.9%.

Indonesia demonstrates notable stability, maintaining a steady 5.0% growth rate across both years. Conversely, China faces deceleration, dropping from 5.0% to 4.4%. Saudi Arabia stands out as the only top economy showing upward momentum, rising to 4.0%, while Turkey anticipates a mild slowdown to 3.4%.

Source: Deloitte Insights & ET Money

Global Tourism

Global Travel and Tourism continued to maintain strong momentum during FY 2026 27, with international travel witnessing sustained growth across most regions of the world. Increased airline capacity, simplified visa processes, improved connectivity, and rising consumer confidence have supported higher travel demand compared to previous years. According to global tourism estimates, international tourist arrivals have largely recovered to, and in many destinations exceeded, pre-pandemic levels, reflecting the continued resilience of the sector and the growing appetite for leisure, business, and experiential travel worldwide.

The travel industry has entered a phase of sustained expansion, supported by rising disposable incomes, favourable government policies, and investments in tourism infrastructure. Several countries have continued to promote cross-border tourism through improved aviation networks and destination marketing initiatives. These developments are expected to support long-term demand and create new opportunities for the global hospitality industry.

It is, however, evident that geopolitical tensions, regional conflicts, inflationary pressures, and volatile energy prices continue to influence global economic conditions and consumer spending. International institutions have indicated that while global growth is expected to remain stable, businesses must continue to navigate higher operating costs and changing travel preferences. Investments in technology, sustainability, and digital transformation are helping hospitality companies improve operational efficiency while delivering enhanced guest experiences.

The India Tourism & Hospitality sector has continued to witness significant growth, supported by strong domestic travel demand, increasing Foreign Tourist Arrivals (FTAs), improved infrastructure, and continued policy support from the Government.

The United States emerged as the largest source market for Foreign Tourist Arrivals (FTAs) to India, accounting for 18.13% of total arrivals, followed by Bangladesh (17.59%) and the United Kingdom (10.28%).

Other key source markets included Australia (5.21%), Canada (4.79%), Malaysia (3.09%), Sri Lanka (2.83%), Germany (2.58%), France (2.08%), and Singapore (2.06%), highlighting Indias broad international appeal across North America, Europe, South Asia, and the Asia-Pacific region.

The diversified mix of source markets reflects sustained growth in leisure, business, medical, spiritual, and MICE tourism, supported by improved air connectivity, enhanced tourism infrastructure, simplified visa policies, and Indias growing reputation as a preferred global travel destination.

The global Travel & Tourism sector continued to grow during FY 2025 26, supported by strong international and domestic travel demand, improved connectivity, and sustained infrastructure investments.

Asia-Pacific, the Middle East, North America, and Europe remained key growth regions, while Latin America, Africa, and the Caribbean recorded steady tourism recovery.

The sector continued to strengthen its contribution to global GDP and employment, driven by rising leisure, business, and MICE travel.

India Tourism

In 2026, the total contribution of travel and tourism to Indias GDP is forecast to reach a record 8.2% of the total economy, translating to a staggering 30,500 billion (USD 372 billion). This milestone reflects a steady acceleration from the 7.3% share ( 24,100 billion) recorded in 2024 and 7.9% ( 27,800 billion) in 2025. The sectors direct year-over-year growth for 2026 is expected to clip along at a robust +9.7%, significantly outperforming the broader economys projected change of +6.1%.

Employment Generation

As a crucial source of livelihoods, the tourism sector in 2026 is anticipated to support an unprecedented 55.40 million jobs, making up 9.3% of total employment in the country. This marks a massive leap from the 46.50 million jobs supported in 2024 and 52.10 million in 2025, demonstrating the sectors incredible capacity for labor absorption and rural-to-urban job migration.

International vs. Domestic Visitor Spend

The revenue dynamics of 2026 show a highly lucrative balance between foreign exchange earnings and domestic mobility:

? International Visitor Spend: Inbound tourism is projected to contribute a substantial 5,850 billion (USD 71.3 billion) to the economy in 2026, registering a year-over-year growth of +12.3%. This positions international tourism as a primary foreign exchange engine, capturing 6.5% of Indias total exports up from 5.9% in 2024.

? Domestic Visitor Spend: While international travel thrives, the domestic market remains the absolute bedrock of the industry. Domestic travelers are expected to spend an unprecedented 27,100 billion (USD 330.5 billion) within the country by 2026, growing at a healthy annual clip of +12.9% from the 24,000 billion projected for 2025.

Source: WTTC

Sustainability at the core

As highlighted during COP26 in 2021, climate change and environmental degradation are worsening at an alarming pace, requiring urgent action to avoid a devastating impact on destinations, businesses, local communities, the global economy, and our way of life. With todays decisions defining the world of tomorrow, there is a need to increase both ambitions and actions to protect people and the planet.

We minimize our environmental footprint by sustainably managing our energy and water use, reducing our waste and carbon emissions, and increasing the use of renewable energy. We employ innovative technologies to plan, implement, and track how we operate responsibly to mitigate climate-related risk, benefiting our business and the communities in which we operate. From design to the guest experience, sustainability is embedded into our business strategy. We collaborate with our associates, hotel owners, franchisees, brands, suppliers, business partners, and guests to actively reduce the environmental impact and risk to our business by constructing and operating sustainable hotels.

Leveraging Technology

While the acceleration of digital technologies and the resulting innovations have been a prominent feature of recent years, digitization has been a growing trend for decades. Although digitization should not be employed to replace human interaction given the high-touch nature of the Travel & Tourism sector, it should be leveraged as a means to enrich the travellers experience and enhance the liveability of the property.

The following technologies are implemented in our properties PAN India:

? Sales Force: Simplify the workflows of our sales, empower our team to be more productive.

? Quality Management System: Stay one step ahead of the competition by addressing concern areas and highlighting opportunities.

? Cloud technology: Connecting hotels seamlessly across locations. ? Contactless payment: Ensuring fast and secure transactions.

? Digital Loyalty Program (REGENTA REWARDS): Enhancing guest retention and rewards.

? Contactless Menu: Streamlining dining and room service experiences.

? Virtual Events: Expanding capabilities for modern meetings and hybrid gatherings. ? E-procurement: Optimizing our supply chain and vendor management.

? HRIS (Human Resource Information System): Effectively managing and supporting our workforce.

Details of Owned Hotels Website: Revenue & Room Nights

Our website continues to witness steady growth in direct bookings, supported by a seamless booking experience and focused digital marketing initiatives. Through targeted campaigns, personalised offers, seasonal promotions, weekend getaways, festive packages, destination-led experiences, and loyalty-driven benefits, we have strengthened our direct customer engagement. The Company continues to enhance the digital guest journey by leveraging AI-enabled marketing, improved website functionality, faster booking processes, and customer-centric innovations. As a result, our brand website has further strengthened its position as one of the most cost-effective customer acquisition channels, contributing to higher direct bookings, improved guest loyalty, and enhanced profitability.

Company Strategy towards performance

With a portfolio of over 123+ hotels across India, Royal Orchid Hotels has built a well-diversified presence spanning business, leisure, resorts, wildlife, spiritual, heritage, hill stations, and destination wedding locations. The Company continues to strengthen its position among Indias leading hospitality brands through a sustained asset-light expansion strategy, strategic partnerships, and a growing presence across Tier I, II, and III cities.

Our marketing approach has evolved into a highly data-driven and hyper-personalised model, enabling us to engage guests through targeted digital campaigns, regional content, and AI-powered customer insights. We continue to promote destination-led experiences, including wildlife retreats, spiritual journeys, hill station escapes, beach holidays, wellness getaways, staycations, workcations, and curated experiential packages, aligned with changing traveller preferences.

Demand for experiential and premium travel continued to remain strong during the year, supported by rising domestic tourism, business travel, destination weddings, and MICE events. This translated into healthy occupancy levels, improved Average Room Rates (ARR), and strong revenue performance across the portfolio.

Our asset-light business model continues to provide the flexibility to expand efficiently while maintaining a balanced mix of business and leisure hotels. By embracing technology, digital innovation, sustainability, and operational excellence, we remain focused on delivering superior guest experiences while adapting quickly to evolving market dynamics and creating long-term value for all stakeholders.

Wedding Market

A wedding is one of lifes most cherished milestones, and at Regenta & Royal Orchid Hotels, we understand the importance of creating memorable celebrations. Whether it is a beach wedding, a hill station retreat, a heritage palace celebration, or an elegant city affair, our portfolio offers distinctive venues backed by experienced event specialists who curate seamless and personalised wedding experiences for every couple.

Destination weddings continue to be one of the fastest-growing segments for the hospitality industry and remain a strategic focus area for the Company. Changing consumer preferences, rising disposable incomes, and the growing desire for immersive celebrations have significantly increased demand for destination weddings. Luxury resorts, heritage properties, and experiential venues have emerged as preferred choices, making wedding tourism a key driver of hotel revenues across leading leisure destinations.

According to industry estimates, Indias wedding industry is valued at over US$130 billion, making it the second-largest wedding market globally. The continued growth of premium weddings, multi-day celebrations, and destination events is expected to drive sustained demand for the travel and hospitality sector, creating significant opportunities for brands with a strong presence across leisure, heritage, and resort destinations.

Below details are the HR data of year on Year:

Year	FY 2025 to 2026
Total Head Count Employees
Employees	8,600
Average age
Average age	33
Employees by gender
Male	88%
Female	12%
Employees by age group
Age group 22-35	68%
Age group 36-45	22%
Age group 46-60	10%
Profile of employees as per education
Graduates	40%
Diploma	51%
Masters	9%
Person-hours spent towards training
Training in person hours	11003
Retention rate (%)
More than 5 years (as % of total)	16%
Employee cost as % of revenue	23%
Room to Manpower Ratio	1.01

Outlook

The global hospitality industry enters FY 2026 27 with strong momentum, supported by resilient economic growth, improving international travel, sustained domestic tourism, and increasing consumer spending on leisure and experiences. India continues to stand out as one of the worlds fastest-growing major economies, underpinned by robust macroeconomic fundamentals, infrastructure development, digital transformation, and favourable government policies. These structural drivers are expected to create a supportive environment for the travel and hospitality sector over the medium to long term.

The Indian hospitality industry is witnessing sustained growth across business travel, leisure tourism, destination weddings, MICE, religious tourism, and premium experiential travel. Rising disposable incomes, expanding air connectivity, new infrastructure projects, and increasing foreign tourist arrivals are expected to further strengthen demand. The continued emphasis on digital adoption, sustainability, and customer-centric innovation is reshaping guest expectations and creating new opportunities for organised hospitality players.

Royal Orchid Hotels Limited is well positioned to capitalise on these favourable industry trends. With a portfolio of over 120 hotels, a disciplined asset-light expansion strategy, diversified presence across business and leisure destinations, and continued investments in technology, digital marketing, and guest experience, the Company remains focused on delivering sustainable and profitable growth. The Companys expanding footprint across Tier I, II, and III cities, coupled with its strong presence in destination weddings, resorts, and experiential hospitality, provides multiple avenues for future growth.

Looking ahead, the Company will continue to strengthen its brand portfolio, expand its hotel network through management contracts and strategic partnerships, enhance operational efficiencies, and leverage data-driven marketing to improve customer engagement and direct bookings. At the same time, Royal Orchid Hotels remains committed to embedding sustainability, innovation, and responsible business practices across its operations while creating long-term value for its shareholders, hotel owners, guests, employees, and all other stakeholders.

Backed by a resilient business model, prudent financial management, and a favourable industry outlook, the Company remains confident of sustaining its growth trajectory and strengthening its position as one of Indias leading hospitality companies in the years ahead.