Macquarie has completed an assessment of several publicly traded Indian hotel groups to determine how exposed each might be to consequences stemming from the Iran conflict. The review concentrates on three metrics: presence in conflict-affected geographies, the proportion of revenue derived from key cities, and reliance on foreign travellers.
1. Lemon Tree Hotels (Outperform, Marquee buy) - According to Macquarie, Lemon Tree is the peer most protected from disruption. The company maintains a managed-fee relationship in Dubai, though the broker expects only a negligible impact from the situation in the Middle East. Within India, roughly 47% of Lemon Tree's revenue is generated in key cities, and the chain has only limited reliance on foreign travellers. A notable source of stable demand is airline crew bookings at Aurika Mumbai; those rooms are supplied under contractual arrangements on a use-it-or-lose-it basis, which supports revenue predictability.
2. Chalet Hotels (Outperform) - Chalet has no operating properties in the conflict region, a factor that removes direct geographic exposure. Nonetheless, Chalet records about 73% of its revenue from key cities and derives roughly 40% of its hotel revenue from foreign guests, a mix Macquarie views as a moderate channel for potential travel disruption.
3. ITC Hotels (Outperform) - Macquarie reports limited visibility into ITC Hotels' exact share of revenue coming from key cities and its exposure to foreign travellers. Despite that opacity, the broker assumes ITC scores highly on both metrics given the company's market positioning.
4. Indian Hotels (Neutral) - Indian Hotels operates approximately 800 keys in the region mentioned by Macquarie, but those rooms are all on managed-fee arrangements and are therefore believed to represent a small slice of overall revenue. The company is considered to have high exposure to foreign travellers. Macquarie also highlights an additional vulnerability tied to TajSats airport operations, which could be affected should flights be cancelled as a result of regional instability.
Macquarie's ranking and commentary concentrate on observable operational footprints and customer mixes; where the broker lacks precise data, it indicates assumptions rather than definitive measures. For readers tracking valuation, a Fair Value calculator is available that combines a mix of 17 industry valuation models to deliver a consolidated view for IHTL and other names.
Bottom line: The broker sees a range of exposure across the sector, with Lemon Tree appearing the least vulnerable based on the metrics evaluated and Chalet, ITC and Indian Hotels showing varying degrees of potential sensitivity tied to city concentration and foreign traveller dependence.