Hotel Pulse
Morgan Stanley says The Leela is a pure play on India’s luxury hospitality boom; sees 35% upside in base case
Morgan Stanley has reiterated its ‘Overweight’ rating on Schloss Bangalore, the company that owns and manages the iconic ‘The Leela’ brand of luxury hotels in India. The global brokerage cited strong industry tailwinds, a high-quality portfolio of luxury assets, low net debt levels, and an attractive valuation as key reasons behind its bullish stance. While acknowledging potential concentration risks, Morgan Stanley believes that with consistent execution and strategic capex deployment, The Leela could see a substantial re-rating in the coming years.
In the base case scenario, the brokerage has a target price of ₹549, implying an upside potential of 35 percent from previous close.
Morgan Stanley said Schloss Bangalore stands out as one of the rare pure-play luxury hotel operators in India. With 93 percent of its operating revenue coming from five owned hotels, the business remains asset-heavy and deeply entrenched in India’s premium hospitality space. The Leela’s properties—known for their blend of classical Indian architecture and modern luxury—enjoy premium pricing and boast industry-leading EBITDA margins and RevPAR (Revenue Per Available Room).
According to Morgan Stanley, these hotels have also earned multiple international accolades, further reinforcing the brand’s positioning as a top-tier hospitality player. “The Leela is one of the most iconic hotel brands in India and its consistent RevPAR outperformance showcases its ability to capture rising demand for high-end travel experiences,” the brokerage said.
RevPAR Upcycle To Stay Higher for Longer
The brokerage expects the luxury hospitality sector in India to benefit from a ‘higher-for-longer’ RevPAR cycle due to steady demand and limited new supply, which is constrained by the capital-intensive nature of the business. Morgan Stanley sees average room rates rising alongside occupancies, driving a projected 12 percent annual EBITDA growth through FY27.
Morgan Stanley added that net income could jump ninefold by FY27, helped by lower interest outgo as the company’s balance sheet is now almost net debt-free. Free cash flows will support a planned capex cycle, including the development of five new properties totaling 475 rooms—one of which will be under a joint venture. These additions are expected to go live by FY28.
“While reported ROCE stood at 7.3 percent in FY25, adjusting for asset revaluation ( ₹13 billion) and recapitalization-linked cash reserves ( ₹12 billion), we estimate an adjusted ROCE closer to 10 percent,” the brokerage noted.
Valuation and Re-Rating Potential
Currently, the stock trades at 18.5x FY27 EV/EBITDA—well below the sector average. Morgan Stanley compared this to the 29x forward EV/EBITDA for branded hotel peers like Indian Hotels Company Limited (IHCL) and 20x for asset owners like Chalet and Juniper Hotels. Given the upcycle in RevPAR and The Leela’s strong execution, the brokerage assigned a target multiple of 25x in its base case and 30x in the bull case, implying up to 35 percent upside.
“We believe the stock can re-rate closer to IHCL’s multiple as the new hotels scale up, earnings grow, and the luxury cycle sustains. Our bull case target price is ₹664, while the base case is ₹549. The bear case, based on a flat RevPAR trajectory and 18x multiple, implies a price of ₹302,” Morgan Stanley added.
Return Metrics to Improve with Capex Deployment
Although FY25 ROCE appears subdued compared to peers like IHCL (20%), EIH (21%), and ITC Hotels (9%), Morgan Stanley expects return ratios to improve meaningfully post FY28. The recent ₹12 billion recapitalization will fund the next phase of growth, ensuring capex is met without straining the balance sheet.
The brokerage also pointed out that most of the company’s interest costs currently consume a large share of EBIT, keeping net profit margins low. However, as capex begins to generate returns and debt remains minimal, return on equity (RoE) is expected to improve from the current 1–2 percent range.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
Hotel Pulse
Sports Hospitality Market to Reach USD 74,318.43 Million by 2036, Growing at a CAGR of 14.12%: Credence Research
PUNE, India, July 16, 2025 /PRNewswire/ — According to a new market research report published by Credence Research, the global Sports Hospitality Market was valued at USD 8,345.70 million in 2018, rose to USD 15,233.39 million in 2024, and is expected to reach USD 74,318.43 million by 2036, growing at a CAGR of 14.12% during the forecast period.
The market is witnessing strong momentum owing to the increasing global appeal of high-profile sporting events and the growing appetite for premium, immersive experiences among both corporate clients and affluent consumers. Demand for VIP suites, exclusive access packages, gourmet catering, and behind-the-scenes privileges continues to surge at major tournaments such as the FIFA World Cup, UEFA Champions League, Super Bowl, Wimbledon, and Formula One Grand Prix. The sports industry’s ongoing shift toward experiential offerings and revenue diversification is further propelling investments in hospitality infrastructure and services.
Technological innovation and international expansion are reshaping the market dynamics. Enhanced digital ticketing, real-time fan engagement, and smart stadium integrations are elevating the guest experience. Additionally, emerging markets in Asia-Pacific, the Middle East, and Latin America are playing an increasingly vital role, driven by infrastructure upgrades and growing sports tourism. Strategic collaborations between sports federations, hospitality brands, and travel operators are expected to unlock new revenue streams and sustain market growth across geographies.
Browse the report and understand how it can benefit your business strategy – https://www.credenceresearch.com/report/sports-hospitality-market
Key Growth Determinants – Sports Hospitality Market
Rising Demand for Premium Sports Experiences
The growing preference for exclusive, high-end experiences among affluent consumers and corporate clients is a major driver of the sports hospitality market. Demand for VIP boxes, luxury suites, fine dining, meet-and-greet opportunities, and personalized concierge services continues to surge at major sporting events worldwide. Corporations are increasingly leveraging hospitality packages to build client relationships and enhance brand visibility, while fans seek more immersive and memorable ways to engage with their favorite teams and athletes.
Expansion of Global Sports Events and Commercialization
The increasing frequency and scale of international sporting events—such as the Olympics, FIFA World Cup, ICC tournaments, and Formula One races—are fueling market growth. Sports organizations are heavily investing in hospitality infrastructure to diversify revenue streams and enhance audience engagement. Coupled with the globalization of sports leagues and the rise of sports tourism, these developments are significantly expanding the market footprint across developed and emerging economies.
Hotel guests are increasingly feeling like they’re getting more bang for their buck, according to the 2025 North America Hotel Guest Satisfaction Index (NAGSI) Study from J.D. Power.
Redesigned for 2025, the study measures overall hotel guest satisfaction based on performance in seven core dimensions—including value, guest room, staff services, facilities, communications and connectivity and food and beverage—across nine segments ranging from luxury to economy.
Despite the average daily rate for a U.S. hotel room reaching a record high of $158.67 in 2024, clean and well-designed rooms, omnipresent amenities such as smart TVs and user-friendly mobile apps are helping boost traveler satisfaction.
Hotel guest perceptions of value received for nightly rate paid increases in every hotel segment in this year’s study, with the most significant year-over-year gains coming in the upscale, midscale and economy segments.
Dogs enjoying a Home2 Suites by Hilton guest room. (photo courtesy of Hilton)
“We’re at an important inflection point in the travel marketplace where several years of record-high hotel demand and the pace of room rate increases is starting to slow,” Andrea Stokes, hospitality practice lead at J.D. Power, said in a statement.
“Hotel owner and operator investments in guest room décor and furnishings, in addition to bathroom updates, are paying off in higher satisfaction. One area in which hotels can significantly influence guest satisfaction without massive capital expense is with technology like smart TVs and updated room temperature controls,” she added.
“Travel is becoming more complex with the potential for flight delays or increased road traffic, so guests want hotels to provide the comforts of home.”
Key Takeaways for 2025
In the era of streaming, it’s no surprise that hotel guests want to be greeted by a smart TV, with 40 percent of surveyed travelers selecting “smart TV/ability to stream my entertainment” as a need to have versus nice to have, up from 21 percent in 2019.
What’s more, 72 percent of respondents indicated their room included a smart TV. That figure is up from 39 percent in 2019. Additionally, six out of 10 said they used the smart TV during their stay.
A premier king room inside the Omni PGA Frisco Resort. (Photo Credit: Omni Hotels & Resorts)
J.D. Power also found that guest satisfaction significantly improved year over year in areas such as furnishings and décor (+.05 points), condition of bathroom fixtures (+.05). and comfort of bed (+.04).
The study also shows that hotel app users report higher satisfaction, earning an average score of 699 (on a 1,000-point scale), which is 68 points higher than those who do not use their hotel brand’s mobile app.
It’s no secret that problems ranging from odors and loud noise to check-in issues can lower satisfaction. Nonetheless, this year’s study shows that they are relatively rare, occurring just 12 percent of the time across all hotel stays evaluated. In those incidents, however, guest satisfaction fell dramatically, plummeting 217 points to 460 from 677.
Highest-Ranking Hotel Brands for Guest Satisfaction
The Ritz-Carlton ranks highest in the luxury segment for 2025 with a score of 779, surpassing The Luxury Collection, which ranked first in 2024.
Meanwhile, Omni Hotels & Resorts conquered the upper upscale segment with a top satisfaction score of 731. Drury Hotels (738) ranked highest in the upscale segment, while Hyatt House (705) finished first in the upper extended stay category for a fourth consecutive year.
The exterior of a Tru by Hilton hotel. (Photo Credit: Hilton Hotels & Resorts)
Other repeat segment winners for 2025 include Home2 Suites by Hilton (upper midscale/midscale extended stay), Tru by Hilton (midscale), Microtel by Wyndham (economy) and WoodSpring Suites (economy extended stay). All four brands won their respective categories for a third consecutive year.
Finally, Hampton by Hilton (694) ranked first among upper midscale brands.
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Canadians looking to embark on a value-packed summer or winter escape will love this promotion. Meliá Hotels and Resorts offers a range of comfortable and upscale properties in sought-after sun destinations.
On every booking made by July 31, 2025, for travel by December 20, 2026, travel advisors will earn up to 7X STAR Points and will be automatically entered for their chance to win one of five hotel stays at Paradisus La Perla Adults Only Riviera Maya, Paradisus Palma Real Golf and Spa Resort, Meliá Las Dunas, Meliá Las Antillas and Meliá Trinidad Peninsula.
Clients looking to escape to a participating property in Mexico or the Dominican Republic can enjoy a wide range of limited-time perks including resort credits and spa discounts, reduced rates and kids stay free pricing.
Cuba Promotions
In addition to reduced rates, here are the offers available at the Cuban properties:
Meliá Las Antillas: Complimentary upgrade from Junior Suite Economy to Deluxe Room.
Meliá Las Americas: Complimentary upgrade from Classic Room to Classic Golf View Room.
Meliá Varadero: No single supplement fees (singles are not required to pay a surcharge for staying in a double occupancy room.)
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Meliá Trinidad Peninsula: No single supplement fees (singles are not required to pay a surcharge for staying in a double occupancy room.)
Paradisus Princesa del Mar: No single supplement fees (singles are not required to pay a surcharge for staying in a double occupancy room.)
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Sol Caribe Beach: First child free (aged 3-12).
Group Booking Bonus
Meliá is also offering group perks for those who book with Sunwing this month. Travel advisors who book their clients a group getaway for travel between November 1, 2025 and December 20, 2026, will earn 11X STAR Points at Meliá’s Mexico and Dominican Republic properties* and 6X STAR Points with Meliá Cuba, while their clients will be awarded instant group savings of up to $400 per pair.
Please note terms and conditions apply. For additional information on Meliá Hotels & Resorts’ Partner of the Month offerings, travel advisors are encouraged to visit the Sunwing Agent Portal.
Related: Sunwing Announces Winter Destinations and Perks
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