Indian hotel companies have been resilient during the pandemic and now the markets are celebrating them
- After a complete shutdown during the COVID-19 pandemic, hotels in India are starting to record sales and are back on the road to recovery.
- Most of the listed hotels are already showing gradual quarter-over-quarter growth with their latest results for the October-December quarter of the current fiscal year.
- The travel and tourism industry appears to be an exhilarated industry with news of the COVID-19 vaccine being rolled out across the world.
Shares of Indian hotel companies have rebounded in recent months, with several indicators pointing to a recovery in travel and tourism. After a complete shutdown during the COVID-19 pandemic, hotels in India are starting to record sales and are back on the road to recovery.
Here’s how major Indian hotel stocks have performed over the past six months
|Society||Change in share price over the past six months|
|Citronnier Hotels||+ 50%|
|Chalet hotels||+ 27.6%|
|EIH Hotels||+ 28.5%|
|Mahindra Holidays and Resorts||+ 40%|
While most stocks have yet to regain their pre-COVID levels, the recovery in recent months has been fueled by a variety of reasons and in particular, with the distribution of COVID-19 vaccines.
Vaccine – a boost for travel and tourism
The rollout of the COVID-19 vaccine has started across the world, raising hopes that people are going on leisure and business trips. âWhile we anticipate a gradual recovery in business travel, leisure demand is already strong and this traction is expected to increase further in the coming months,â said an ICICI Direct report dated February 12.
Most of the listed hotels are already showing gradual quarter-over-quarter growth with their latest results for the October-December quarter of the current fiscal year. Analysts say this is reflected in the movement of their stock prices. ‘One is the resumption of business, from a complete shutdown, businesses have gradually started to recover. Second, they did a good job of rationalizing costs during the pandemic, âHimanshu Shah of Dolat Capital told Business Insider.
Even unlisted companies like OYO Hotels and Homes have experienced a recovery in their activity thanks to ârevenge travelâ. The term gained popularity in China, after stranded people began traveling inside the country, just to get out of their homes. OYO said that during the Valentine’s Day weekend, its online traffic increased by 70% from pre-COVID levels.
Premium hotels will be the first to respond to demand
The coronavirus pandemic has changed a lot of things, and the most important of these is our safety and health priority. And this is where high end hotels will have an edge over others, as people travel more often. âMost of the listed stocks are upscale hotels. Business and leisure travelers will now prefer brand names because they will remain cautious, âKranthi Bathini, equity strategist at WealthMills Securities, told Business Insider.
Despite all the disruptions during the pandemic, travel and tourism are expected to make a big comeback as Bathini says “the man is made for the mobilization”.
Back on track for business
Hotel companies also announced that they are now back on track with their plans for new hotels across the country.
|Society||New projects already in development or signed||To be completed by|
|Chalet hotels||Commercial projects at Renaissance Complex, Powai, Mumbai Marriott Complex, Whitefield, Bengaluru||Q4FY23 & Q4FY22|
|Lemon||Lemon Tree Mountain Resort, ShimlaLemon Tree Vembanad Lake Resort, Alleppey, KeralaAurika, Intl. Airport, Mumbai||The Mumbai project is due to be completed by 2022.|
|IHCL||Signing of six new hotels with more than 1,100 rooms in the third quarter|
And that can translate into more business for hotels. “Despite the interruption of investment activity since March 2020, there are emerging signs of reassessments and a slow recovery in demand, improvised cost structures and reduced profit levels over the next two years. years, “says a report from real estate services company JLL.
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