In today’s Finshots, we tell you about the Adani Group’s clever hotel play.

But here’s a quick side note before we begin. All year long, our small team reads, researches, and writes tirelessly about everything that matters in business and finance, so you can understand it in the simplest way possible. And thanks to your love and readership, we’re motivated to do this every day, barring a few festivals and public holidays.

Starting tomorrow, though, we’ll be taking a short publishing break from our regular Finshots stories until the New Year. Over this week, we’ll step away from our usual writing spree and use the time to figure out how we can make Finshots even better in 2026.

And for that, we need your help.

We’ve put together a short Finshots Readers’ Survey to understand what you enjoy about our stories and where you think we can improve. So before you dive into today’s story, please take a moment to fill it out.

But don’t worry about missing us too much because we won’t disappear entirely. We still have something exciting planned that’ll keep dropping into your inbox through the week, until we’re back with our next Finshots story on January 2nd.

Now, on to today’s story.

The Story

When the IndiGo fiasco unfolded, it sparked conversations in our editorial meetings. One theme that kept coming up was that IndiGo doesn’t really have a neck-to-neck rival. With over 60% of the domestic market under its belt, calling Indian aviation a “duopoly” often feels more like a technical label than reality.

At the same time, we were reading about how the Adani Group was quietly levelling up its airport business. And one move stood out in particular — the group’s acquisition of a majority stake in the Flight Simulation Technique Centre (FSTC), India’s largest independent flight training and simulation provider.

That’s when a thought naturally crept in. Adani already owns airports. It trains pilots. It controls critical infrastructure. On paper, it seems to have most of the ingredients needed to build a serious airline and challenge incumbents. And yet, there was no Adani airline.

The more we thought about it, the more one explanation made sense: unit economics. Aviation is a brutal business if you look at it purely through a financial lens. It demands enormous upfront capital, runs on wafer-thin margins, and leaves little room for error.

That hunch was more or less confirmed a few days ago when Jeet Adani, Director of the group’s airports business, told CNBC TV18 that aviation simply doesn’t fit the group’s investment philosophy or return expectations. Which means that the Adani Group will never think of having its own airline even if regulations were to become friendlier in the future.

But then came a curveball.

Just the next day, The Times of India reported that the group is making a major push into hospitality. It has over 60 hotels planned across the country, which would make it one of the largest hotel portfolios in India.

And that’s where things get interesting.

Because anyone who has even a passing familiarity with hotels knows this isn’t exactly a high-margin business either. Hotels bleed cash in quieter periods and require steady spending on staff and upkeep. So a big chunk of revenue is eaten up before the profit margins kick in.

Which makes you wonder, “If aviation’s unit economics were too messy for the Adani Group to touch, why dive headfirst into hotels?”

Well, because the Adani Group doesn’t actually want to run hotels day to day. It just wants to place a smart bet on the sector by owning the real estate where hotels operate.

That model already exists in India. Take Chalet Hotels, for instance. Chalet is a listed real estate and hospitality company, but at its core, it’s a landlord. It owns premium hotel and office properties in prime city locations, especially around airports and business hubs.

What it doesn’t do is run hotels or build its own hotel brand.

Instead, it lets global hotel chains like Marriott or Westin run the show. These operators handle everything from staffing and guest experience to bookings and daily operations. In return, Chalet earns a management fee and a share of the hotel’s performance, while staying firmly in the background as the asset owner.

And that’s precisely why the model works.

Chalet avoids the full operational risk of running hotels. It doesn’t obsess over daily occupancy swings or service-level micromanagement. Its focus stays on returns, deciding when to invest in upgrades, and fine-tuning things like room mix, restaurants, and banquet spaces to get more value from the same property.

That’s pretty much the playbook the Adani Group seems to be following as well.

It doesn’t want to run hotels. It wants to build them, own the infrastructure, and monetise those assets by tying up with established hotel operators. That will help it compete with big hotel chains like Taj, ITC, or Oberoi by owning the real estate they operate from, possibly through partnerships with players like Indian Hotels.

Once you look at it this way, a lot of Adani’s past moves start to make sense.

Take its aggressive bids for the stressed assets of Jaypee Group. Jaypee was once a sprawling infrastructure empire with interests across cement, power, real estate, expressways, hospitality, healthcare, and sports. But years of heavy borrowing caught up with it. Debt piled up, projects stalled, and several group companies eventually slid into insolvency.

When Jaypee’s assets hit the block, Adani went racing against heavyweights like Vedanta, Jindal Power, Dalmia Bharat, and PNC Infratech to scoop them up.

In hindsight, that aggression looks smart. These were solid assets weighed down by nearly ₹55,000 crore of debt. Strip away that debt overhang, plug the assets into an existing infrastructure ecosystem, and suddenly they’re far more valuable than the price paid for them.

The same logic applies to Sahara Group. Sahara owns a sprawling portfolio across India in the form of hotels, malls, office spaces, and residential properties. It was once big enough to sponsor India’s national cricket team. But today, it’s stuck in a court-supervised asset sale, trying to repay nearly $2.8 billion to investors.

The Adani Group could also play another smart card here. Hotel businesses typically borrow at much higher interest rates because lenders see them as risky and cyclical. Infrastructure, on the other hand, enjoys cheaper funding. So if Adani picks up distressed hotel assets like Sahara Star and reframes them as airport-adjacent infrastructure, it can refinance that debt at much lower rates. Just by swapping expensive hotel loans for cheaper infrastructure financing, the savings could run into hundreds of crores every year.

But all this still doesn’t explain the timing of Adani’s sudden push into hotels.

But what if we tell you that this isn’t really about Adani suddenly wanting to foray into hotels? It’s about strengthening its airports business.

As of now, this hotel push will sit under Adani Airport Holdings Limited (AAHL), which could be demerged and listed separately in a few years. And for that, AAHL needs a clear growth story.

Right now, AAHL earns money from two broad buckets. One is aeronautical revenue — things like landing fees and parking charges paid by airlines. The other is non-aeronautical revenue, which comes from retail, food, lounges, and advertising.

But the problem is, you can’t fully control how these grow. You can’t decide when people fly, how long they stay, or how much they spend.

Hotels fix that. A good hotel next to an airport brings in a steady flow of business travellers, airline crews, conferences, and events. That spills over into more spending across the airport ecosystem.

So hotels aren’t a side bet. They’re a way to make the airport itself more profitable and predictable.

And it’s not just about hotels either. Remember the big news earlier this year about Adani taking on Reliance’s Jio World Convention Centre by planning Mumbai’s largest international convention centre near the airport? That move neatly completes the puzzle.

Because a massive convention centre beside an airport attracts large, high-profile events. That means frequent travel by business leaders, delegates, and international visitors. And when they fly in, they’re likely to stay at nearby premium hotels and spend more across the airport ecosystem.

Put all of that together, and you’ve built a diversified revenue engine around the airport. One that makes AAHL far more attractive to equity investors when its IPO eventually comes around.

That’s also why the group plans to invest about $11 billion over the next few years to expand its airport network. This diversification doesn’t just help Adani ride India’s aviation growth but also helps reposition the airports business beyond just a collection of runways and terminals.

And the clever bit?

All of this happens without Adani having to operate a single hotel. Pretty smart, eh?

Until next time…

If this story helped you make sense of the Adani Group’s sudden foray into hotels, then do us a favour and share this with your friends, family, or even strangers on WhatsApp, LinkedIn, and X. And tell them to subscribe to Finshots too.