After a strong rally in stocks like Indian Hotels, Taj GVK, EIH, Lemon Tree etc. in the last one month, stock market investors are investing in hotel stocks. According to secondary market experts, this rise in hotel stock price can be mainly attributed to the unlocked theme, which is going to determine hotel stock prices in the medium to long term. He further added that the ongoing IPL 2022 season, destination weddings and destination corporate meetings have led to an increase in hotel prices by 15 to 25 per cent as against pre-covid levels, which could lead to a higher number of hoteliers in the short to medium term. . Experts said the outlook for hotel stocks is looking good for all types of investors and this could be a possible reason for stock market investors to check hospitality stocks.
Speaking on the short to medium term sentiment driving the rise in hospitality stocks these days Dalal Street, Anuj Gupta, Vice President – IIFL Securities said, “Hospitality is the first and foremost reason for the rise in share prices. unlock theme, Now the wedding season has started and destination weddings are in full swing in the domestic hospitality market. Destination meeting has also started in view of the unlock theme. Apart from this, the long season of IPL is also going on which is giving a lot of momentum to the hotel business. If we look at the occupancy, leading hotels in India are reporting 85 to 95 per cent occupancy, while hotels in the North East are 100 per cent booked as of May 2022. Dalal Street Bull, which is reflecting the rise in quality hotel stocks.
Rahul Sharma, Research Head, Equity99 said, “The hotel industry has witnessed a sharp decline in the recent times amid the pandemic. The hospitality segment showed a strong recovery in the October-December (Q3FY22) quarter. The Covid restrictions have been eased and the reopening of offices and business travel is set to see a strong foothold. Also in Q1FY23, the market is expecting a good jump in profits for holidays, business travel, hotels with IPL 2022 to contribute to its earnings.
Partha Nyati, Founder, Tradingo said, “Hospitality stocks were among the hardest hit stocks due to the coronavirus pandemic. During the pandemic, hospitality stocks suffered for consecutive quarters as occupancy remained at an all-time low due to negative operating leverage effects. After the Omicron wave, which saw fewer hospitalizations and deaths, we can expect the final game for the COVID pandemic. We can see that most of the population has been vaccinated, the era of work from home is decreasing, revenge tourism is becoming a major trend, business trips, conferences have started, thus we are able to provide business and leisure hospitality. One can expect good recovery in both. Business.”
Parth Nyati said that the hospitality industry is witnessing a big change in the wake of Unlock theme, “Management commentary from most of the hospitality companies has been positive and now they are focusing on capex.”
When asked about the top hotel stocks to buy in the stock market today, Rahul Sharma of Equity99 said, “Our top picks for good returns are Indian Hotels Company, Taj GVK Hotels & Resorts and Lemon Tree Hotels.”
Anuj Gupta of IIFL Securities, advising positional investors to look beyond hotel stocks, said one can also look at Delta Corp and EIH.
Disclaimer: The views and recommendations given above are those of individual analysts or broking companies and not of Mint.
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