India’s hotel industry is poised to carry forward its strong momentum into financial year 2026, following an impressive performance in fiscal 2025.According to Jefferies, the sector ended financial year 2025 with robust Ebitda and profit growth of 26–27% in the fourth quarter, alongside a 17% year-on-year surge in revenue per available room. For the full year, revenue per available room rose approximately 12%, while Ebitda saw over 20% year-on-year growth.Looking ahead, Jefferies expects continued healthy performance driven by favourable demand-supply dynamics, growing domestic travel, and strong pricing power. The brokerage forecasts revenue per available room growth of 7–9% and an Ebitda CAGR of 14–19% for financial years 2025–2027E. Indian Hotels Co., ITC Hotels Ltd., and Chalet Hotels Ltd. remain Jefferies' top picks.RevPAR Growth, Margin Tailwinds To ContinueThe hotel sector enters fiscal 2026 with a strong exit rate from financial year 2025. Fourth quarter of the previous fiscal RevPAR growth averaged 17%, with standout performances from Chalet, Samhi, and ITC Hotels.Pricing strength, alongside rising average room rates, supports continued double-digit revenue growth. Margins are also expected to expand further, aided by operating leverage and premium segment occupancy gains.Domestic Demand Fuelling India's Hotel Boom: Lemon Tree CMDSolid Demand Fundamentals And Expansion PlansThe industry continues to benefit from sustained demand in leisure travel, weddings, and the MICE segment. Branded hotels in major metros and tier-2/3 cities are expected to drive growth. IHCL led new inventory additions with 74 signings and 26 openings in fiscal 2025. Chalet Hotels and others also announced major greenfield projects. The growth pipeline remains healthy, reinforcing long-term optimism.Cautious Optimism Amid Geopolitical RisksWhile Indo-Pak tensions caused brief travel disruptions in May, the impact was short-lived. Jefferies expects business normalcy in June and a steady start to fiscal 2026.ITC Hotels To See 15% Revenue Growth In Next Three–Four Years: Elara Securities' Prashant Biyani. Read more on Markets by NDTV Profit.