In capital-intensive sectors with long payback periods, investors often follow lead indicators that determine growth in times to come. For luxury hotel chains, a few such indicators have led investors to believe that the sector, which has been in the dumps for long, is poised for a turnaround in profitability. During the nine months ended December 2017, demand for luxury hotel rooms on a pan-India basis grew 5.6% year-on- year, while supply grew at a slower 3.2%. Data also shows that demand growth has been outpacing supply in luxury hotels since fiscal year 2014 (FY14) and the margin is getting wider. Occupancy rates, another lead indicator, rose to an impressive 65-66% from the 58% low it hit a few years ago. According to global hospitality consultant HVS, the degree to which room rates have grown is marginal, and the next 48-60 months are crucial to see how the demand-supply equation pans out.