Leela Palaces reports strong Q2 growth and first Dubai resort stake

Robust Financial Growth and Dubai Entry

Leela Palaces Hotels & Resorts Limited has reported a significant 11% year-on-year increase in total revenue, reaching INR 3,334 million for the second quarter of fiscal year 2026. The company’s EBITDA surged by 17% to INR 1,607 million, highlighting strong operational performance. This positive momentum is further showcased by a profit after tax (PAT) of INR 747 million, marking the fourth consecutive quarter of profitability.

In a key strategic move, the company has ventured beyond Indian borders by acquiring a 25% stake in a luxurious beachfront resort situated on Dubai’s famed Palm Jumeirah. This marks Leela Palaces’ maiden international property, signaling an ambitious step into the global hospitality market. The Dubai resort, managed by Brookfield-managed private funds holding the remaining 75%, encompasses a sprawling 23-acre oceanfront area featuring a 361-key hotel, 182 residences, and three exclusive villas.

Operational Highlights and Domestic Expansion

The CEO highlighted the company’s exceptional RevPAR growth of 13%, driven by enhanced occupancy rates and average daily rate improvements across both city and resort properties. Leela’s portfolio performance outpaces the Indian luxury sector threefold, with EBITDA margin improvements to 48.2%, a testament to rigorous cost controls and efficiency measures.

Domestically, Leela is on track to expand with nine new hotel projects underway, spanning notable Indian destinations including Agra, Ayodhya, Bandhavgarh, Mumbai, Ranthambore, Sikkim, and Srinagar. Alongside hotel expansions, the company has unveiled “ARQ by The Leela,” an exclusive members-only club, and a high-end retail division at Leela Palace Bengaluru, showcasing premium brands such as Sabyasachi and Zoya.

Historical Context of The Leela Brand and Indian Luxury Hospitality

The Leela Palaces brand is recognized as India’s only listed luxury hotel company focused solely on premium properties. The evolution of luxury hospitality in India has parallels with its rich cultural heritage and burgeoning affluent travel market. Since the 1960s, when tourism became part of national economic planning, the country has seen steady growth in luxury resorts and hotels, catering to both domestic and international guests.

Traditionally, Indian hospitality has embraced diverse accommodation styles, including converted palaces, heritage hotels, and houseboats, reflecting the country’s vibrant history and regional charm. The emergence of branded luxury hotel groups like Leela represents a modern chapter in this legacy, offering world-class service and blending tradition with contemporary grandeur.

Luxury Hospitality’s Role in International Tourism Growth

India’s luxury hotel sector is positioned to benefit from global tourism trends favoring unique cultural experiences coupled with high-end comfort. The Leela’s entry into Dubai—a key global travel hub known for its ultramodern infrastructure, vibrant beach resorts, and dynamic yachting scene—creates synergy with high-net-worth travelers seeking sophisticated resort experiences in prime marine destinations.

Strategic Significance of the Dubai Palm Jumeirah Investment

Dubai’s Palm Jumeirah has established itself as one of the world’s premier destinations for luxury tourism, with a strong emphasis on beachfront resorts, marinas, and exclusive yacht charters. Leela’s stake in this 25% beachfront development aligns with the global hospitality industry’s shift towards experiential, destination-driven travel that merges scenic water views, marine activities, and upscale accommodations.

This expansion offers a foothold in a region celebrated for its year-round sunshine, pristine waters, and world-class marina facilities—elements that appeal to sailing enthusiasts and luxury yacht charter clients. The property’s sizeable hotel and residential mix provides opportunities not only for traditional hospitality but also potentially for waterfront events and yachting activities, contributing to the destination’s allure.

Growth Drivers and Forward-Looking Outlook

Post its initial public offering, Leela Palaces has maintained a robust financial structure with a low net debt to EBITDA ratio of 0.5x and an upgraded AA (Stable) credit rating. The company forecasts continued mid-to-high teen EBITDA growth in FY26, supported by an enhanced portfolio and favourable market conditions.

The luxury hospitality sector in India and the Gulf region is poised for growth, driven by rising discretionary income, expanding travel markets, and demand for experiential leisure offerings. Leela’s focused investments and expansion plans suggest strong positioning to capitalize on these trends.

Table: Key Financial Metrics for Q2 FY26

List: Upcoming Indian Hotel Projects by Leela

• Agra – a city famed for its historic Taj Mahal and growing luxury tourism
• Ayodhya – an important religious and cultural destination
• Bandhavgarh – known for wildlife tourism and national park adventures
• Mumbai – India’s vibrant metropolis and commercial hub
• Ranthambore – a popular tiger reserve and nature retreat
• Sikkim – mountainous region with adventure tourism potential
• Srinagar – renowned for houseboats and scenic lake-based stays

Implications for Sailing and Yachting Enthusiasts

Leela Palaces’ move into Dubai’s Palm Jumeirah is especially notable for the sailing and boating community. Palm Jumeirah boasts premier marinas, luxury yacht charters, and a thriving marine lifestyle, adding an exciting dimension to the resort experience beyond traditional luxury hospitality. For travelers who combine leisure stays with boating or yachting, this international foothold offers promising new options.

With yacht charters and marine activities integral to Dubai’s tourism offering, guests can indulge in everything from ocean cruises to fishing excursions, all within proximity to luxurious accommodations. This integration enhances the appeal of the broader Gulf region as a yachting destination, blending cultural richness, beachfront experiences, and luxury marine activities seamlessly.

Következtetés

Leela Palaces Hotels & Resorts has demonstrated strong financial growth with an 11% revenue increase and a notable 17% rise in EBITDA during the second quarter of FY26. The strategic 25% investment in Dubai’s Palm Jumeirah beachfront resort not only marks its first international property but also positions the company within one of the world’s most sought-after luxury and marine destinations.

Expansion efforts continue robustly within India, with nine promising new hotel projects enhancing the brand’s portfolio. The company’s prudent financial management and optimistic growth forecasts underscore its readiness to capitalize on the flourishing luxury travel sector.

For travellers drawn to elegant hotels by the sea or those who prefer the thrill of the open water, Dubai offers an unparalleled mix of luxury resorts, yachts, and boating activities. The Leela’s entry into this marine playground is perfectly timed to meet the desires of discerning tourists and sailing aficionados alike.

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