Weddings, events to ensure investors stay checked into hotel stocks
Subscribe to enjoy similar stories. Investors in shares of hotel companies are enjoying a good view. So far in 2024, stocks of The Indian Hotels Co.
Ltd (IHCL), EIH Ltd, Chalet Hotels Ltd and Lemon Tree Hotels Ltd have gained 97%, 64%, 41%, and 27%, respectively. A good part of the recent stock performance can be attributed to the recovery seen in the September quarter (Q2FY25), after a challenging Q1 due to heatwaves and elections. The sector saw a pickup in growth across the board last quarter led by strong occupancies and improvement in ARRs or average room rates.
Investor sentiments could also be boosted by the Q3 outlook, which appears decent owing to strong demand, aided by a higher number of wedding dates and robust meetings, incentives, conferences, and exhibitions (MICE) activity. Motilal Oswal Financial Services expects key hospitality players, especially in the luxury and upper upscale category, to report about 10-12% RevPAR growth in Q3, driven by about 8-10% ARR growth and 100-200 basis points improvement in occupancy. RevPAR is short for revenue per available room and one basis point is one-hundredth of a percentage point.
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