As the ICC Men’s World Cup approaches, hotel stocks are witnessing a surge in anticipation of a high-demand period. The tournament is scheduled to take place across 10 stadiums in India from October 5 to November 19, 2023, and analysts predict a remarkable 100% occupancy rate for hotels during October and November.
Shares of prominent hotel chains like Lemon Tree Hotels, Indian Hotels Company, and Chalet Hotels have seen gains of 1% to 2% during the recent trading session. Chalet Hotels, in particular, reached a 52-week high of ₹596.90 per share on the BSE, while Indian Hotels’ share price maintained levels close to its 52-week highs.
A recent analysis by domestic brokerage firm Emkay Global Financial Services has contributed to the overall optimism surrounding the Indian hospitality sector. The report highlights the positive outlook for the industry in the coming years, driven by strong demand growth outpacing supply growth. It anticipates an extended period of high occupancy rates and increased revenue per available room (RevPAR) for India’s hotel industry.
Emkay Global Financial Services points to various factors supporting this positive trend. These include rising per-capita income, India’s growing share of international visitor arrivals (ITAs), and expectations of a 7.5% Compound Annual Growth Rate (CAGR) in office space in key cities from Q3CY22 to CY25.
The brokerage firm initiated coverage on several hotel companies, giving Indian Hotels Company and Lemon Tree Hotels a ‘buy’ recommendation, while Chalet Hotels received a ‘hold’ rating due to limited upside potential. Emkay’s report notes that all three players in the hotel industry have strong pipelines for room additions, with expected room-count CAGR ranging from 10% to 13% over FY23-26E. Additionally, they anticipate improved margins and deleveraging for these companies by FY26, driven by increased revenue and cost reduction efforts.
Technical analysts have also expressed positive sentiments toward hotel stocks, citing favorable price volume action. They advise traders to maintain a positive bias, emphasizing key support levels for Indian Hotel, Lemon Tree, and Chalet Hotels. These support levels are crucial for assessing the continued upward trajectory of these stocks.
As the excitement builds for the ICC Men’s World Cup, hotel stocks are not only gearing up for a busy season but also attracting investor attention, supported by the optimistic outlook shared by industry experts and analysts.”
(Note: The content is fictional and for illustrative purposes only, as the event and the mentioned predictions are not real.)