The bellhop of 2024 has just rung, and the hospitality industry is dusting off its champagne flutes after a turbulent year. For investors, the question looms: are hotel stocks ready to check into a bull run, or will they be stuck in the lobby, waiting for room service?
Imagine a hotel lobby bustling with activity – that’s what high occupancy rates look like. These rates show how many rooms are filled, directly impacting revenue. Look for hotels with consistent occupancy, especially during peak seasons, and those poised to benefit from travel trends like staycations or bleisure (business + leisure) trips.
Revenue per available room (RevPAR) is like your room service bill – it tells you how much a hotel earns per room. Track RevPAR growth to gauge a hotel’s pricing power and ability to command premium rates. Hotels with strong brand recognition, unique offerings, or prime locations often boast higher RevPARs.
High debt can be a heavy suitcase for any hotel. The debt-to-equity ratio tells you how much a hotel owes compared to its own money. Lower ratios indicate financial stability, while higher ones raise concerns about the hotel’s ability to weather economic storms.
A fresh coat of paint and a trendy new restaurant can make all the difference. Hotels investing in renovations and expansions are betting on the future. Look for companies with strategic growth plans, particularly in high-demand markets, to see if they’re preparing for a bonanza.
| # | Name | CMP Rs. | Mar Cap Rs.Cr. | NPM Ann % | EV / EBITDA | Asset Turnover | Int Coverage | 1Yr return % |
| 1 | I T D C | 465.2 | 3990.03 | 12.57 | 33.23 | 0.61 | 109.77 | 28.72 |
| 2 | TajGVK Hotels | 239 | 1498.59 | 20.81 | 14.37 | 0.51 | 6.86 | 8.25 |
| 3 | Oriental Hotels | 122.9 | 2194.99 | 13.56 | 20.52 | 0.49 | 4.82 | 66.39 |
| 4 | EIH | 265.3 | 16590.9 | 18.86 | 19.65 | 0.47 | 22.71 | 41.92 |
| 5 | Indian Hotels Co | 438 | 62213.47 | 17.3 | 30.74 | 0.44 | 7.2 | 37.48 |
| 6 | Samhi Hotels | 173.45 | 3781.81 | -48.44 | 21.91 | 0.32 | 0.31 | |
| 7 | HLV | 28.9 | 1905.29 | 4.27 | 58.27 | 0.31 | 4.98 | 139.17 |
| 8 | Mahindra Holiday | 388.15 | 7838.22 | 4.56 | 17.81 | 0.28 | 1.89 | 43.84 |
| 9 | Lemon Tree Hotel | 129.6 | 10267.5 | 16.04 | 26.17 | 0.24 | 2.1 | 41.23 |
| 10 | Chalet Hotels | 680.95 | 13986.3 | 13.93 | 30.72 | 0.24 | 2.46 | 93.16 |
| 13.54 | 27.34 | 0.39 | 5.93 |
| # | Score Card | Out of 4 |
| 1 | I T D C | 3 |
| 2 | TajGVK Hotels | 3 |
| 3 | Oriental Hotels | 2 |
| 4 | EIH | 3 |
| 5 | Indian Hotels Co | 4 |
| 6 | Samhi Hotels | 0 |
| 7 | HLV | 1 |
| 8 | Mahindra Holiday | 0 |
| 9 | Lemon Tree Hotel | 1 |
| 10 | Chalet Hotels | 2 |
IHCL boasts a robust performance, featuring an impressive Revenue Per Available Room (RevPAR) of Rs. 9840, accompanied by a substantial room capacity of 22,465 and an admirable occupancy rate of 75.9%. It stands out by securing the top position in the list of the top 10 hotel stocks with the highest market capitalisation.
Notably, Foreign Institutional Investors (FIIs) have substantially increased their stake from 12% to 22%. With record-breaking sales, a consistently high occupancy rate, and above-average hotel room revenue, IHCL emerges as a stock deserving close monitoring.
The travel landscape is constantly evolving. Keep an eye out for hotels embracing eco-friendly practices, catering to niche markets like wellness retreats or remote work hubs, or leveraging technology like AI concierge services. These trendsetters could be the next hospitality superstars.
Remember, investing is like a journey, not a destination. Do your research, diversify your portfolio, and stay informed about industry developments. By following these tips and keeping your eyes peeled for promising trends, you might just find yourself checking into a lucrative hotel stock in 2024.
So, will you be packing your bags with hotel stocks or opting for a staycation from the market? The choice, dear reader, is yours.
Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.
Published on: Dec 7, 2022, 1:29 PM IST
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