Hotels see firm revenue matrix in February: 11MFY24 growth in double digits


Indian Hotels Co , Lemon Tree Hotels , EIH Ltd, Chalet Hotels  share prices have seen gains of  73-127 % over last one year. Even for Juniper Hotels the gains stand at around 26.5% even since its listing in February.

The hospitality industry received a lot of attention during recent past and was for the correct reasons. Travel demand has continued to increase post-COVID led restriction continued to ease and India’s strong travel theme continued to play and is still strong. The past six months have seen large events as G-20 meet, cricket world cup followed by holiday and wedding season. 

Strong Growth Rate in February

February has seen strong traction continue as indicates the data. As per data published by Jefferies’ Global Lodging analyst Jaina Mistry, Average room rate for Hotel Industry in India grew 8% year-on-year in February-24.  

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Stronger year-on-year growth in RevPAR (revenue per available room) of 10%, was driven by higher ARRs (average room rate) and higher occupancy, which increased by 160bps in February. ARR/RevPAR growth for 11MFY24 was approximately 14–15% YoY. Jefferies still continues to build 7-9% ARR growth for FY25 and FY26 for Indian Hotels. 

Hotels on Expansion spree

Indian Hotels revealed a green field project to build a 350-key greenfield Taj hotel in Indore,  one of the largest convention facilities in Central India. A few days back Indian Hotels also opened a new scenic hotel in Munnar. 

Lemon Tree announced a Franchise Agreement for upcoming hotel in Ranchi, Jharkhand , a property to open in Coimbatore by FY26, and opening of a Keys Select in Udaipur. Analysts at Jefferies highlighted that In the year 2023, Average daily rated in Udaipur exceeded those in Jaipur by a factor of two and the next closest city in India by 1.6.

Among another key announcements have been fund raising by Chalet Hotels to the tune of 200 crore. It is also in process of acquiring Courtyard by Marriott Aravali Resort in Delhi NCR.

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Experts bullish on outlook: see sustained growth for next half-decade.

Sunil Damania, Chief Investment Officer at Mojo PMS said that projections indicate a robust 8-10% increase in demand for hotel rooms over the next five years, outpacing a modest supply growth of 5-6%. Events like IPL further boost demand.

The government, led by Prime Minister Modi, has prioritized tourism, advocating for domestic travel over international trips. Even high-profile destination weddings, once held abroad, now favor Indian locales. Recent initiatives like the “PRASHAD” scheme and efforts to attract Non-Resident Indians (NRIs) are catalysts for tourism and, consequently, the hotel industry. Iconic sites such as the Statue of Unity and the Ram Mandir in Ayodhya are drawing visitors, bolstering demand for accommodations.

With such promising indicators, Damania maintains a bullish outlook on the hotel sector, foreseeing sustained growth for at least the next half-decade.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions



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Published: 22 Mar 2024, 05:50 PM IST


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