Leela Palaces Hotels & Resorts Ltd (NSE: THELEELA) Q4 2026 Earnings Call dated Apr. 28, 2026
Corporate Participants:
Abhishek Agarwal — Senior Vice President – Financial Planning & Analysis and Investor Relations
Anuraag Bhatnagar — Whole-time Director and Chief Executive Officer
Ravi Shankar — Head – Asset Management and Chief Financial Officer
Analysts:
Binay Singh — Analyst
Karan — Analyst
Unidentified Participant
Girish Choudhary — Analyst
Akash — Analyst
Abhay Khaitan — Analyst
Vaibhav Muley — Analyst
Achal Kumar — Analyst
Karan Kamdar — Analyst
Vinamra Hirawat — Analyst
Presentation:
Operator
Ladies and gentlemen, good morning and welcome to the Q4FY26 earnings call of Leela Palaces Hotels and Resorts Ltd. As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing Star then zero on your touchstone phone. Please note that this conference is being recorded.
I now hand the conference over to Mr. Abhishek Agarwal from the Leela. Thank you. And over to you sir.
Abhishek Agarwal — Senior Vice President – Financial Planning & Analysis and Investor Relations
Thank you operator. Good evening everyone. I’m Abhishek Agarwal, Senior vp, FPA and Investor Relations. Welcome to the global earnings call for the Q4 and FY26 results of Gila Palaces Hotels and Resorts Ltd. India’s only pure play luxury hospitality company.
We have published our results and uploaded the investor presentation on exchanges earlier today and you can also find it on the company website, www.dalila.com investors. Before we start a disclaimer, we would like to inform you that the management may make certain comments on this call that one could deem forward looking statements. Specifically, the financial guidance and pro forma information that we will provide on this call are management estimates based on certain assumptions and has not been subjected to any audit, review or examination procedure.
The company does not guarantee these statements and is not obliged to update them at any time. Participants are cautioned not to place undue reliance on these forward looking statements while making the investment decisions. To answer your questions and you take you through the story, we have the senior management of Lilila on the conference call.
Joining me today are Mr. Anurag Bhatnagar, four time Director and CEO and Mr. Ravi Shankar, Head of Asset Management and CFO. Without further ado, I would like to hand over the call to Mr. Bhatnatha. Over to you Anubar.
Anuraag Bhatnagar — Whole-time Director and Chief Executive Officer
Thank you. Thank you Abhishek. Pleased to have you with us. As we further strengthen how we engage with our stakeholders alongside the next phase of Hila’s growth. Good evening everyone and thank you for joining us. Hila for FY26 has been a transformational year defined by strong financial and operational performance, disciplined and consistent execution and sustained leadership in Indian luxury hospitality. We have outpaced the industry in growth and margins and also had the highest ever annual key expansions in our portfolio. Importantly, this performance was delivered in a year characterized by elevated external volatility underscoring the resilience of both our brand and our operating platform.
Let me begin with the macro context and the key performance highlights in that context, FY26 was a year in which the Indian hotel industry navigated multiple headwinds across aviation disruptions and geopolitical events against the backdrop of the Middle east conflict. In Q4, FY26, the Leela delivered double digits growth in operating revenue and operating EBITDA. This performance was underpinned by a 15% year on year increase in ADR, reflecting the Leela’s strong consumer pull, brand pricing power and disciplined execution. Together these results reaffirm the brand’s premium positioning and ability to deliver superior commercial outcomes even in a challenging operating environment. Our business has been rooted in the thesis that our demand is more resilient and the previous quarter underscores the same. While occupancy in March took a hit due to international travel being disrupted, we continue to grow ADRs in double digits.
Domestic demand remains robust and we are focused on it to offset the impact on international inbounds. In past instances of disruption like Operation Sindhur, occupancy bounced back quickly to previous levels and we remain confident that the current impact will get mitigated once the situation normalizes. The structural drivers of luxury hospitality demand in India remain firmly intact and the outlook continues to be compelling, supported by rising aspirational spending, wealth creation and a growing cohort of experiential luxury consumers. Importantly, new luxury supply in the Leela’s key micro market remains constrained.
This has enabled us to consistently outperform the market, drive market share gains and sustain improvements in both occupancy and pricing. Together these factors underpin strong same store growth over the medium to long term. Taking you through the highlights of FY26 at the Leela, Guest experience is the bedrock of all performance outcomes and our defining differentiator for FY26. We recorded a net promoter score of 86 maintaining our position as the highest rated luxury hospitality brand in India. Importantly, we extended our lead to 12 points above the Asia Pacific luxury industry average.
This sustained multi year outperformance reflects the consistency of our service delivery and the depth of our brand equity directly supporting long term pricing power. We also delivered significant market share gains continuing to outperform the broader luxury segment in India. In FY26 Dalila achieved 11 points increase in market share with our RevPAR index strengthening to 150. Notably, our RevPAR growth exceeded industry by more than 2 times supported by double digit growth and market share expansion across both key city markets and leisure destinations. This translates into a RevPAR premium of approximately 6,000 INR over the India luxury segment.
Overall NFI 26. Our same store RevPAR increased 14% supported by double digit growth across all five owned palaces and an overall 13% increase in ADR. The operating leverage from this pricing led growth resulted in a 19% year on year increase in operating EBITDA with margin expanding by 167bps to a best in class 49%. This operating momentum culminated in a record profit after tax of 403 crores in FY26 representing a decisive turnaround from a PAT of 48 crores in FY25. This 8.5x increase in profitability underscores the structural strengthening of the business driven by sustained same store Revpar growth, targeted asset enhancements, key portfolio additions and reduction in finance costs.
From an expansion standpoint, FY26 marked Leela’s fastest pace of expansion ever with 23% growth in keys totaling to a visibility of 966 additional keys. These additions came across Mumbai, BKC, Dubai, Jaisalmer and Kurg and will strengthen our presence across marquee urban and leisure distributions. Our net Debt reduced by 50% with net debt to EBITDA now at a conservative 1.6x in FY26 supported by a strong AA credit rating and strong cash conversion.
We now operate with meaningful financial headroom to fund expansion and manage future capex while maintaining flexibility across cycles giving you some more color into our operating performance and growth plans. Our non room revenue, our focus on FNB excellence continue to deliver results in FY26. FNB revenues grew 15% year on year driven by strong performance across both restaurants and banqueting. This growth was supported by approximately 13% increase in non resident footfalls across the city hotels reflecting the increasing relevance of the Leela as a destination for dining events and experiences beyond resident guests.
Consequently, non resident covers now constitute 54% of the total cover mix at our city hotels. We have continued our progress on strategic growth and expansion of the Leela footprint. During 4th quarter of FY26 the Leela strengthened its leisure portfolio with the acquisition of 71 key Ultra Luxury all villa operational resort in Kurg to be unveiled as the Leela Kurg Forest Century, making our entry into nature immersive and wellness anchored hospitality. We are very excited about this hotel addition as it’s a unique hotel built to Leela standards across 76 acres and with 25 rooms having heated pools. The programming of this hotel will offer multi day experiences for a multi generational family. This acquisition reinforces our strategy of discipline, high return expansion into premium leisure destinations and underscores our focus on value creative growth.
In addition, we are all set to open the Leela Jaisalmer and the Leela Luxury residences Mumbai in FY27. We continue to deliver growth in our portfolio additions. The Leela Hyderabad, a managed hotel which opened in demonstrated strong operating leverage by achieving healthy margin within its first year of operations.
Operating at 62% occupancy in first fiscal year of launch and delivering an average daily rate which is 1.24x compared to its peer set. We continue to actively evaluate value accretive opportunities that complement our portfolio and reinforce the Leela’s positioning across India’s most iconic and high growth market. Our greenfield development agenda continues to progress steadily. Construction activity and execution milestones are advancing on plan across Bandavgarh, Srinagar, Sikkim, Agra, Ayodhya and Vantambor with progress across design, development, demolition, excavation, piling and site preparation and structural works.
The Leela continues to be recognized as the leader in luxury hospitality across global and domestic platforms. We are once again voted India’s Best Hotel Group at the Travel and Leisure India Best Awards 2025 for the sixth consecutive year which is a strong endorsement of our sustained consumer profits. We also received The Michelin Keys 2025 for the Leela Palace New Delhi, Leela Palace Jaipur and the Leela Palace Chennai, placing these hotels in a globally benchmark way.
On the FNV front. ZLB23 at the Leela Palace Bang Yoru continues to feature across 30 Best Bars in India and Asia’s 50 Best Bars 2025 alongside continued recognition for Le Cirque, the Library Bar and Megu. Overall, these recognitions reinforce the strength of our brand and the consistency of our delivery across key experiential pillars. People remain at the heart of our success. During FY26 we reinforced our position as an employer of choice through industry leading talent development initiatives and onboarded 45 future leaders through our Leela Leadership Development programs.
This year we also achieved great Place to work recognition. We are also preparing for the launch of the Leela center of Excellence, our dedicated learning infrastructure. During FY26 we remain committed to our ESG philosophy, creating long term value. While delivering experiences that are both luxurious and responsible. We commissioned 2.25 megawatts of solar capacity at the Leela Paris Chennai, increasing our green energy usage to 67% of our total consumption while reducing power and fuel cost to 3% of operating revenues from 3.3% in FY25 enhancing long term operating efficiency. We advanced our social impact initiatives by supporting the livelihoods of thousand plus women through upcycling 3 metric tons of floral waste, sourcing 45% of our tea from carbon neutral estates and transitioning to 100% artisan made jute bags, reinforcing our commitment to responsible luxuries. This is a very important year for us as we enter the new financial year.
We are very pleased to share with you that the Leela has now completed four decades of customer love and trust, four decades of true Indian luxury. The 40th year serves as a strategic platform to reinforce the brand’s leadership in true Indian luxury, leveraging four decades of heritage and excellence. We will deepen guest engagement, strengthen brand visibility and accelerate premiumization through curated experiences and differentiated storytelling across the portfolio.
I will now hand over the call to Mr. Ravi Shankar, our CFO and Head of Asset Management to take you through the financial highlights for the quarter and the year ended 31st March 26th.
Ravi Shankar — Head – Asset Management and Chief Financial Officer
Thank you Anurag Good evening everyone. Let me take you through the financial performance for the quarter and the year ended 31 March 2026 Quarter 4 FY 26 months again highlighted the strength, efficiency and the resilience of the Leela platform. In line with the strong ADR momentum. Operating revenue increased 12% YoY to 484 crores while the operating EBITDA rose 13% YoY to 266 crores delivering a best in class EBITDA margin of 55% and expansion of 57 basis points. PAT increased from 117 crores in quarter four FY25 to 172 crores.
Turning to FY26 performance, the company reported a robust all round performance driven by improvement in both ADL and occupancy. Strong momentum in the retail and group segment supported a double digit revpar growth across both city hotels and resort properties. This drove operating revenue up 15% YoY to 15. 27 crore. Operating EBITDA rose 19% YoY to 743 crores with margin expanding by 167bps to 49%. Again best in class. Over 60% of the incremental revenue converted to operating EBITDA, reflecting robust operating leverage and disciplined cost management. Active asset management continues to be a key pillar of value creation at the Leela with a focus on enhancing guest experience, unlocking incremental revenue streams and EBITDA and improving the asset level return.
During FY26 we progressed multiple value accretive initiatives across the portfolio including launch of the Earth by the Leela at the Leela Palace Bangalore. Our invite only ultra luxury membership club with the development work at Advanced Stages ARC is slated to open in New Delhi in quarter one FY27 and in Chennai in quarter two FY27 followed by Mumbai in the later part of the year.
Expanding this high engagement platform across key markets, we also refurbished and added seven FNB outlet across the Leela Palace New Delhi Jaipur location We relaunched of approximately 334,000 square feet of high end retail space at Leela Palace Bangalore 100% occupied Reimagine Spa and wellness offering at the Leela Palace Airport. Our wellness initiatives have been expanded to Bangalore as well.
Introduction of exclusive kids club at Leela Palace Jaipur and Udaipur Conversion of select villas into premium private villas catering to a multi generational travel at the Leela Palace Airport. These initiatives are being executed with disciplined capital allocation and are targeted to deliver a projected E loan cost of approximately 5%, reinforcing our focus on driving high returns from existing assets while strengthening the long term quality and durability of the earnings.
To summarize, FY26 demonstrated the Leela ability to outperform the industry with resilience and consistency despite geopolitical challenges. The continued expansion of the Leela footprint takes our portfolio to over 5,200 luxury keys across 24 properties spanning 15 operational hotels and nine in the pipeline. Our balanced mix of owned and managed kids enable disciplined capital deployment while expanding its reach and scale. Before concluding, we would like to thank all our associates for their unwavering commitment to excellence and guest delight.
Abhishek Agarwal — Senior Vice President – Financial Planning & Analysis and Investor Relations
Thanks Anurag and Ravi. Operator we can start the Q and A session now.
Questions and Answers:
Operator
Thank you. We will now begin the question and answer session. Anyone who wishes to ask a question may press Star and one on their touchstone telephone. If you wish to remove yourself from the question queue, you may press star and two participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Our first question comes from the line of Binay Singh from Morgan Stanley. Please go ahead.
Binay Singh
Hi team. Congrats for good set of numbers. Given the environment we are in, could you throw a bit more light on how were trends in March because we see quite a sharp drop in occupancy whereas the war impact would have been only there for one month. So could you specifically share some trends on March and how is April May also trending? That will be the first question.
Anuraag Bhatnagar
Hi Vinay, Good evening. The West Asia War has had an impact on travel as you all know, both inbound and outbound. So just to give some context, Leela has almost a 50, 50% share in terms of both international and domestic business. Our domestic business has not been impacted at all. And while some part of our international business has been impacted from a key source market.
Just for context, despite the disruption for the overall quarter, we have achieved a 15% ADR growth and a 6% RevPAR growth year on year despite the disruption in the month of March. What we have also done we have strengthened our domestic customer base which has allowed our occupancy in April to recover to your question, to similar levels as last year and healthy RevPAR growth versus same time last year. This is also based on the strength of our robust sales and distribution channels in India where we have over 300% sales associates, nine regional sales offices and revenue members on the ground that control nearly 2/3 of our revenue which comes from our direct channels.
We continue to be very nimble, keep watching the situation very closely and keep working with agility on all the segmentation. And we expect the domestic market to remain a strong opportunity for future growth as well as we approach the holiday season while the inbound presents a future opportunity given the strong brand recall and the brand love that we have from our key source markets post stabilization.
Binay Singh
Thanks for that. But just to sort of any numbers on how marches and how like so March would have been down double digit for us and then April are we talking about high single digit revpar growth?
Anuraag Bhatnagar
So March yes there was an impact on occupancy I would say because some of our key sports markets like US and UK there was an impact in terms of occupancy but our resilience on a pricing power and all that allowed us to mitigate that impact of occupancy through our adr. But as I mentioned in April we have seen the pace come back to same time last year levels but we definitely expect maybe a high single digit or early double digit growth in the terms in the month of April.
Binay Singh
Okay, so we are saying that the high single digit revpar growth in the month of April which in a way is a good outcome compared to March.
Ravi Shankar
But Vinay, just to add May and June will be very exceptional, good performance month for us and for the quarter we will do double digit growth in revenues and ebitda.
Anuraag Bhatnagar
Also Vinay, for context, if you look at it, the only segment for us that was impacted was international and H1. Typically, if you locked off for the next six months is almost 1/3 of H2, you know, in terms of the impact that it has on our overall business plan in that sense. Yeah.
Binay Singh
And international contribution also would be lower for you in this quarter. Right. Given the weather.
Anuraag Bhatnagar
So it’s dropped from a 50% share to around 40 odd percent share where our domestic has risen to approximately 60.
Binay Singh
Secondly team, could you share the management fees number for the quarter and the year?
Ravi Shankar
So the management fees for the quarter for the full year we have done across management fees of 35 crores. We have done and we are looking to for the next year we’ll have a growth again because our managed hotels will have ramped up. So we will be doing around. So there will be an improvement in the whole management fees because the Hyderabad portfolio, Hyderabad hotel has ramped up to almost 63% occupancy when the managed hotels now the key hotels are doing well. So that will have a double digit growth in our management fees as well. Moving forward.
Binay Singh
Come back in the queue.
Operator
Thank you. The next question comes from the line of Karan from Ambit Capital. Please go ahead.
Karan
Yeah, hi, thanks for the opportunity. Just a couple of questions from my side. Firstly, have you seen any meaningful cancellations or postponements in mice events due to the evolving geopolitical environment and are these events getting deferred into upcoming quarters or being lost altogether?
Anuraag Bhatnagar
So Karan, thanks. Great question. We obviously had cancellations and mice events that were booked across the portfolio in the month of March because of all the geopolitical tensions. What we did, we have given them credit notes and deferred them between the next six to nine months. So we expect many of them, a very high percentage of them coming back to us in the next few quarters.
Karan
And then secondly on the Coorg acquisition, how has been the initial response? And when you say 170 crores of stabilized revenue, are you also what kind of ARR are you penciling in for that number? And also does that include the 19 villa expansion in phase one?
Anuraag Bhatnagar
So Kur Karan, just to take you back is like we have recently acquired Kurk on 18th of March as you know. So right now our focus is to whilst the real estate is amazing and the asset quality is extremely good, it’s fully built up on Leela standards with a seven acre lake and an all villa property. Right now there’s a lot of work happening, a lot of training happening in terms of soft aspects, something that Neela is known for. This is our first foray into a forest sanctuary experiential destination product. Hence we are very, very excited about it. These are right now simulations and guest feedback has been very, very positive on the asset and we have not rebranded it yet. There’s a site visit and evaluation happening as we progress and we are looking forward to rebranded at the end of this quarter or early next quarter as a full fledged Leela Forest century. And that is when we expect all our distribution to start kicking in.
And with all the Leela in terms of loyalty programs and customers and all of that, the initial response and the guest feedback has been very, very encouraging. Although it’s not yet to be rebranded. Several touch points and experiential which are catering to the next generation travelers, mice, wellness seeking travelers and even people who are seeking longer itineraries to experience the entire ecosystem and the destination. This is the kind of funnel that we already building up going forward.
And to your specific question in terms of expansion, once we open hotel and stabilize we’ll definitely evaluate because just to remind you, only 20 acres out of the 76 acres has been used up right now. So we definitely see an opportunity to do that. But we’ll come back to you at the right time because right now our focus is to open it on brand and open it soon as the leader for the century.
Karan
And last question to you Ravi for Ayodj Agrand onsambour We’re now looking at CY28 instead of FY28. So is there a slight delay here? And also if you could talk a bit about the cost inflation that you might be seeing in terms of construction costs and then how are you looking at the capex number for FY27 and 28?
Ravi Shankar
Just to answer in terms of these three hotels we have just, you know, put CY1 or 2/4 of construction risk always moves because of the approval when you open the hotel. But we are all the approvals of all these three hotels are already in place, the funding is already in place, the construction have started. So that’s the reason we have, you know, it’s all on pace. The capex numbers for these hotels remains the same. There is no escalation in the cost. Binna. So number five minutes is here.
Karan
Great, thanks Ravi. Thanks Anurag and all the best.
Operator
Thank you. The next question comes from the line of Deepak Saha from Ashika Institution Equities. Please go ahead.
Unidentified Participant
Hi, thanks for the opportunity. So first question is if you can highlight, I mean overall revenue growth mid double digit and repa growth 6%. So the faster element of growth is coming from FNB or management fees for the quarter.
Ravi Shankar
So you know FFNB also contributes 40% of the hotel revenue. If you see our FNBU banquet grew by more than 10%. FNBU is close to a double digit growth and even our managed hotel income has also improved with Hyderabad property ramp up to the full potential of almost 63% and ADR growth almost 1.2x of the of the market. And we also got additional, you know, H and A fees from our hotels because of the contract terms that we have. As a result, we have been able to get a double digit revenue and EBITDA growth.
Unidentified Participant
Just to follow up on that. So then in the FNB growth side, the non guest footfalls are higher. I mean are quite significant in alignment with what we saw last quarter.
Ravi Shankar
Yes, our non resident covers have increased almost 9 to 10% for the quarter and for the full year they have almost grown by 12%. So and our focus continues in driving both non resident covers and growing our in house capture ratio.
Anuraag Bhatnagar
Sorry, I just like to add something to what Ravi mentioned, if you recollect. In every quarter we have been saying that Leela, our biggest differentiator is the luxury ecosystem. We give as much importance to food and beverage experiences and dining programs as we do to the rest of our business. FFNB is nearly 40% of our business, which has grown by 15% as Ravi mentioned. And a very high percentage of non resident food falls across all our events and spaces and restaurants.
Unidentified Participant
Got it. That’s helpful. So one last question. On the Dubai side, I know it’s very early and dependent on a lot of things beyond our control, but just from taking over that particular property, do we have any plans in terms of fast forwarding or delaying? What’s the status there in terms of taking it over and upgrading it to a Leela brand? Is there any change compared to where we were earlier?
Anuraag Bhatnagar
No change in our plans. Firstly, I’d like to just remind everyone that everyone is safe on the ground and our physical asset has not been impacted at all. It’s also worth noting that we are 25% shareholder there and impact to our larger business plan is minimal. We are also fortunate to have a strong capital partner, Brookfield, who’s the remaining 75% owner. So none of our plans have been impacted because of this geopolitical events.
It’s very hard to predict how these events will pan out in the future and what the recovery will look like. But one thing we are very clear about is that the new supply in Dubai is going to be very muted in the near and long term, which will eventually create a very positive fundamental in the long run. I’m sure you’ve seen a lot of headlines in the market regarding hotels shutting down in Dubai or refurbishments in the near term and long term. While our hotel continues to remain operational and we are focused on breaking even operationally at this stage, there could be an opportunity for us to take a larger market share when the market recovers.
Anyway, our plan is to start a refurbishment work. This was our original plan as well. By the end of this calendar year, which we would then accelerate and reopen and launch the property in 2028 under the Leela brand. By this time, we are hopeful, I mean, we are talking of like significant 12 to 15 months from now that we are hopeful that this market would have seen a recovery. Regarding residential sales, which was a part of our business plan, we had budgeted sufficient time to expand execute the sales over the next two, three years.
Unidentified Participant
Right. Thank you. That’s really helpful. And all the best by 5.7. Thank you.
Operator
Thank you. The next question comes from the line of Girish Chaudhary from Avendus Park. Please go ahead.
Girish Choudhary
Hi, good evening. Thanks for the opportunity. Firstly on code, I mean regarding your assumptions of 165 to 175 crore stabilized revenues, when do you think this can be achieved? In year one or year two? And as a follow up for the 19 villas which are expected to come up any, any capex number and when will that be spent?
Ravi Shankar
So the 165 crores of revenue numbers include the 19 villas that we had planned for phase two. This number will be achieved in the year four when those 19 villas will also come into play. The capex that we have planned for those additional villas, around 21 crores that we would spend to make those 19 villas.
Girish Choudhary
Okay, got it. And just on the occupancies, how should we look at for fiscal 27? The blended occupancies for the year fiscal 26 were 69%. So how should we see between your city properties and the resorts? For fiscal 26 we saw a meaningful improvement in occupancies for resort properties. So how should we see for FY27?
Ravi Shankar
So occupancy for FY27 will be in early 70s for sure. The city hotels will do in mid 70s and resorts will be due in, you know, mid 60s to late 60s.
Girish Choudhary
Got it. Thank you.
Operator
Thank you. The next question comes from the line of Akash from Nomura Holdings. Please go ahead.
Akash
Hi. Am I audible?
Anuraag Bhatnagar
Yes.
Operator
Yes. Aakash.
Akash
Yeah. Hi. Congratulations on great performance, sir. Just to run again on the 4q fy26 numbers. I think this time room and fnb revenue numbers were not penned down. Were not penned down in the ppt. Could we just get the exact room in fnb revenue for 4q fy26 room, fnb and hmf please.
Ravi Shankar
So you know, maybe we can collect on a separate call to view deep dive numbers on the rooms and FNB and hma. But what we had spoken earlier that rooms grew by, you know, for the quarter four by almost 6%. FNB grew by almost double digit numbers and HMA other income also grew by double digit number.
Akash
Understood. And how much would the, how much revenue would we get from the corg? Acquisition in FY27. What kind of top line are we seeing from that hotel specifically?
Ravi Shankar
So this will be our first operating year where we are right now working on the whole the rebanding process. And we’ll be doing the occupancy, you know in early 40 and for the first four years we’ll do somewhere around, around 65 to 70 crores will be the first year of revenue and very healthy EBITDA margins will do as we do in our Vera portfolio hotel almost 55% which we do for other resort hotels in our portfolio.
Akash
Understood. That’s all the question I had. Thank you.
Operator
Thank you. The next question comes from the line of Abhay Kaitan from Access Capital. Please go ahead.
Abhay Khaitan
Yeah, thank you for the opportunity. So firstly on the 4Q performance, if you can help break the RevPAR growth of 6% in city hotels and resort hotels. And also for April you mentioned that the growth is actually tracking for single digit growth. So there also. Are we seeing like a broad based growth across city or resort or is this one segment better than the other?
Ravi Shankar
So if we talk about the occupancy where you know we did an occupancy, you know growth at quarter for FY26 we were 72%. Last year we did 78, that was 6%. That’s mainly because of the war impact. If the war cancellation would not happen, we would have them. Single occupants were little more than what we did for quarter four FY25. But if you look at the ADR, ADR grew by almost 15% number 27,000 we went to 32,000. As a result the RevPAR was 6% because of the occupancy drop.
Anuraag Bhatnagar
And the occupancy has dropped in a city hotels which had a larger share of international business. So I just want to reiterate that the only sub segment of demand that got impacted because of the war was our international business from our key source markets. But we see that dampening as we go forward and we see that not reflecting in the future pace of bookings. Our resorts were insulated and resorts continue to like Ravi mentioned earlier, May and June we see a very strong rebound happening in resorts and even in April we see that, you know, it getting the, this compression, getting offset even in our city hotels.
Abhay Khaitan
Understood that is very helpful. My second question is again follow up on what you mentioned right now. So given that if the international travelers are sort of offset by by higher domestic, do we see some risk to other revenues or the FNB revenues and therefore on the margin side or do we expect that to remain in the same yoy?
Anuraag Bhatnagar
Not really what we have seen over the last few years, especially at the Leela. We can talk with confidence basis our last year. Headquarters that our domestic travelers travel as much, they stay as long while the international business has a larger longer length of stay. Because typically if you come from long haul markets like the US you would probably stay for three and a half to four nights where the average domestic traveler will stay for two two and a half nights. But the spending on fnv, the spending on SE revenue is the same. But going back, given the brand love and the recall that we have in international markets, Leela has always been voted as one of the finest luxury brands in the world consistently by their users and the customers. We expect when the international business starts coming back to its normal state, we’ll be the first to pick up and bounce from there which adds us, gives us another layer of opportunity.
Ravi Shankar
And also if you see a non resident cover, those are growing almost 12% by your wine. That also helps in driving our FNB revenue even if you have a slightly lower international mix.
Abhay Khaitan
Great, that is very helpful. Thank you.
Operator
Thank you. The next question comes from the line of Vaibhav Mule from High Tong India securities. Please go ahead.
Vaibhav Muley
Hi sir, thanks for the opportunity and congratulations on a strong set of numbers. Strong especially in a weak demand period. My first question was on our revenue growth. We reported RevPAR growth of 6% while revenue has grown by 14% year on year. I just wanted to understand the bridge between the room revenue growing by 6%, FNB growing by 9 to 10% while HMA again is as you said would be in low double digits. So have we seen additional delta coming in from corporate guru Grazot which is pretty significant. And is there also delta that’s coming in from our commercial leased area Bangalore property?
Ravi Shankar
We already explained you know the ration for the increase in the double digit number. If you look at the room revenue growth hasn’t really impacted by 6% of due to the war. FNB contributes 40% of the total hotel revenue which grew by double digit. We have also seen the SMA fees grow double digit in some of our managed properties based on our management contracts and ramp up of decently open hotel like Hyderabad.
Also we have seen a strong growth in HMA fees in this quarter and expect this trajectory to continue. This is on the back of the ramp up in our performance across several managed properties along with our ability to charge higher fees in some cases where we have invested key money into our.
Vaibhav Muley
Understood sir. And secondly on Dubai asset for Palm Jumeirah Resort since current environment is uncertain and we have seen real estate prices plummeting in Dubai market itself, is there a possibility that we may have to take any sort of write off some. On our investment in Dubai in the near term, if the situation persists for a longer period. Is that a possibility?
Anuraag Bhatnagar
We are evaluating the situation but we don’t see any such possibility. And as we had said that the basis on which we had underwritten this asset in terms of our real estate pricing was very conservative. And it’s too early for us to say how the situation pan out and we’ll evaluate it. We are very, very strong asset management focus and we’ll keep everybody posted as the situation and the market evolves. We evaluating the situation literally every day and we block and tackle as required.
Vaibhav Muley
Understood sir. And lastly on the weddings portion, did we see any benefit in March in terms of shift from some of the weddings which were planned outside India, which got shifted into domestic leisure markets and going forward in Q1 and Q2 as well, do you expect more traction coming in for from weddings?
Ravi Shankar
Yes, that’s correct. There were some of the wedding that were booked in the Middle East. We were able to take three of such weddings in our hotels in the month of March. And there are queries also in the month of April and May for some of such weddings which will also have to drive incremental revenue on the wedding segment.
Vaibhav Muley
Understood sir. Thank you so much and all the best.
Anuraag Bhatnagar
Thank you.
Operator
Thank you. The next question comes from the line of Achal Kumar from HSBC Bank. Please go ahead.
Achal Kumar
Hi, thanks for the opportunity. First of all, I wanted to move away from revenue and just want to understand about the cost. Basically in this Q4, I think most of the costs were sort of quite inflated. Some.
Anuraag Bhatnagar
Sorry Achal, you’re not clear. Can you repeat that?
Operator
Achar, please unmute your line in case if you are on mute. Since there is no response from the participant, we will move to the next participant. That is Karan Kamda from Choice Institutional Equities. Please go ahead.
Karan Kamdar
So I had a question on the cost side. Only now that we are facing some disruption in the Dubai property, are we expecting any cost overruns to impact margins or will that not be a huge cost overrun for us?
Ravi Shankar
It will not be a huge any cost impact for us. Anyway, you know the operator who is managing the hotel will continue to manage till end of this year. And our plan was that we’ll get the handover on the 1st of January 2027 and we’ll refocus the hotel by end of this year and rebrand for January 2028. The plan remains the same and there is no cost overrun on that front.
Karan Kamdar
Okay, great sir. Secondly, can you maintain detail out what plans we have for the ARQ franchise and what is sort of our revenue model. Are we sort of going for a membership model and what are revenue expectations there for 27, 28 maybe?
Anuraag Bhatnagar
Thank you for the question. I mean AHRQ is really a great milestone achievement in our asset portfolio. We opened the first AHRQ club in Ela Palace Bangalore in the last financial year which is FY26. And we are opening two clubs in this financial year. One in this quarter itself in Neela Palace New Delhi and the second one in Chennai. These are great members only club and very rarefied spaces which create a compounding effect for the rest of our business and gives us access to lifetime access to ultra HNI and HNI customers.
There is an initiation fee model for which member has to pay and membership is only by invite. So they have to pay an initiation fee and then there’s a run rate fee that they have to pay every year. The memberships are currently either for 10 years or for lifetime. This is what we are doing for our founding members and eventually as we grow we will also evaluate other membership models so that we can, you know, whilst we are being very, very relevant when it comes to the quality of the real estate and the privileges and programming and then we can scale up to have the larger share of memberships there.
Karan Kamdar
Got it sir, any, any idea on what kind of number are you targeting? If not the revenue number but what kind of membership number are you targeting?
Anuraag Bhatnagar
See the current, the current initiation fee is 45 lakhs plus GST. As I said this is only through invite. We have a waiting list and a funnel of memberships across the all the major metros. We are meeting them our overall goal on stabilization once we have all the clubs open. And let me also tell you, in addition to Bangalore, Chennai and New Delhi, we are also looking for the art club in Mumbai as well. And this has also come on the feedback of our guests.
We are looking at an overall stabilized number of 2000 members because at that number we feel is the right fit where we can serve them, take care of them and give them that kind of a luxury experience that they have paid for.
Karan Kamdar
Good. Thank you so much. Thank you.
Operator
Thank you. Ladies and gentlemen, due to time constraints we will take the last question from Vinamra Hirawat from Jeffrey’s group. Please go ahead.
Vinamra Hirawat
Hi sir. Am I audible?
Operator
Yes.
Anuraag Bhatnagar
Yes.
Vinamra Hirawat
So Congrats on good third please.
Operator
Vinamra, you are not audible now.
Vinamra Hirawat
1.8 versus FY25 and 26 block. Whereas last year this was 2.5%. Is there a reason for this and do we see any spike in this going forward?
Ravi Shankar
So our net debt previously EBITDA is 1.66 as of FY26. And we expect a similar net debt to EBITDA in the next year as well. And this would go down to 1x and even a lower number as we move forward.
Vinamra Hirawat
Sorry sir, I was talking about depreciation, not net debt.
Ravi Shankar
The depreciation, almost 100 crores will remain in the same line in the next two, three years. Only when we have the new hotels operating. Then only the depreciation numbers will start to increase marginally.
Vinamra Hirawat
Okay. Okay, thank you.
Operator
Thank you. The next question comes from the line of Achal Kumar from HSBC Bank. Please go ahead.
Achal Kumar
Yeah, hi. I’m sorry, my line was disconnected. So as I started I wanted to understand about the cost. Basically if I look at all the cost, you know, all looks inflated. So for example, your employee cost, FNB cost, everything is as a percentage of revenue are significantly above the Q4 last year. So what’s the reason? Is it like only impact on March revenue had such a big impact. And then going forward, are you thinking about taking any steps to cut down your cost to protect your margins? So that’s my first question. If you could give a bit of a color understanding on that.
Ravi Shankar
So Anachal, we have a very active asset management approach in cost management. A very efficient cost structure. Most of our costs have just grown by inflation only. There have been cost increase in sales and marketing and sales commission for asking a reason. If you see the flow through has been 60%. This industry leading flow through margin. Even if you look at our EBITDA margin, we are operating at a 49% EBITDA margin which is 167 dips better than same time last year, full year.
If you look at all the costs, all the cost is a lower percentage to the gor. Except for marketing and commissions where obviously Expedia and Agoda started charging on a gross basis rather than a net basis. That was one of the main reason. And obviously our share of GHA revenue also increased. And there was some commission on the sales side which has increased. Otherwise all other costs as a percentage of revenue is lower than what was last year.
Achal Kumar
But Ravi, I mean if you see employee cost in Q4 last year it was 15.9% in, in Q4 this year is 16.6%. Similarly your other costs are up 7.70bps. So I mean you know, not only the marketing cost, looks like all the costs have gone up. That’s where I wanted to understand what’s the reason for that.
Ravi Shankar
Until you in payroll, obviously there has been the whole impact of taking accrual on the for the new labor court where we have taken an impact on the both the leave and cashmere and gratuity that has been an exceptional item in the payroll cost that has come in other we have added few employees for the new value drivers that we have added as a result of that cost. This year you will see the our value drivers firing full cylinders and the revenue impact will come. But those people have already been hired for the simulation, the training piece, if you exclude all that.
Achal Kumar
So should we, should we expect these costs to go down as a percentage of revenue going forward?
Ravi Shankar
It should. It should.
Achal Kumar
Okay, My second question is about the, about the net debt to EBITDA. Of course you had 1.6, which looks very comfortable going forward. How do you see in FY27? Do you think stable? Do you think it’s going down further? Or do you think because of the capex coming through, it could go up a bit? So what is your color? Any thoughts on that, please?
Ravi Shankar
I’ll tell you, we obviously debt will increase for the capex that we do for the pipeline asset. But since our EBITDA will increase, our net debt to EBITDA will remain in the levels of 1.66 and moving forward will come down to lower to 1.4 and then come to closer to 1. Obviously if we do more acquisitions, then it will go a little higher, but once all these assets start generating ebitda, it will come to a very comfortable level even below one.
Achal Kumar
Right. Okay. And my last question is on your comment regarding the city hotel versus resorts. So it would be great if you could give a bit of a color in terms of performance, ARRs and occupancy by different cities like Delhi, Bangalore and all that’ll be very helpful. Please.
Ravi Shankar
That actually we can connect separately and we can give you, you know.
Achal Kumar
Sure. Perfect. Thank you so much, Ravi.
Operator
Thank you. Ladies and gentlemen, in the interest of time, that was the last question for today. For any further queries, please reach out to the investor relations team at Leela. Thank you for joining us. You may now disconnect your lines.