Hotels Stocks Like IHCL, Lemon Tree, ITC Fall Up to 6% on Kashmir Travel Cancellations

Hotel stocks took a hit on Friday, with shares falling as much as 6% on the BSE due to concerns about growth in the travel and tourism sector. This decline comes after reports of widespread booking cancellations following a recent terror attack in Pahalgam, Jammu & Kashmir — a popular tourist destination during peak season.

Stock Performance of Major Hotel Chains

• Indian Hotels Company (IHCL) share price fell 5% to ₹780, down 7% over the past three sessions.

• Lemon Tree Hotels share price dropped 6% to ₹136.70.

• EIH share price slipped 5% to ₹369.

• ITC Hotels share price down 4% at ₹192.60.

• Mahindra Holidays share price fell 4% to ₹303.80.

• Chalet Hotels share price dropped 2% to ₹805.65.

Read More, Laurus Labs Share Price in Focus After Q4 Profit Jumps 3x to ₹234 Crore, Revenue Rises 19%. 

Tourism Impact and Booking Cancellations

According to reports, tourism in Kashmir saw a massive increase in recent years, with tourist arrivals rising from 6.65 lakh in 2021 to 35 lakh in 2024. However, the recent terror incident has led to a major wave of cancellations — a Srinagar-based tour operator reported that 90% of bookings until June have been called off. Many families are rescheduling their travel plans, causing a rush at the airport.

CareEdge Ratings on Hospitality Sector Trends

CareEdge Ratings noted that while the industry has seen demand recovery, high land and construction costs, long development timelines, and sector uncertainties have made companies more cautious about new investments. Instead of building new properties, many brands are expanding through management contracts to reduce capital costs.

The agency expects:

• A 4-5% annual growth rate in new hotel projects over the next few years.

• Continued strong demand, especially in Tier 2 and Tier 3 cities.

• Occupancy levels to remain stable at 66-68% in the next fiscal year.

Changing Segment Mix

More than half of the new hotel supply is expected to come from the Upper Midscale and Midscale Economy segments, reflecting rising demand for affordable and quality accommodations outside major cities.

About Indian Hotels Company & ITC Hotels

The Indian Hotels Company Limited (IHCL), part of the Tata Group, manages various brands including:

• Taj: A symbol of luxury and Indian hospitality.

• SeleQtions and The Claridges Collection: Unique luxury and boutique properties.

• Vivanta and Gateway: Full-service upscale hotels.

• Ginger: Offering budget-friendly, modern accommodations.

• Tree of Life: Peaceful, private escapes in scenic locations.

These brands cater to a broad range of travellers — from luxury seekers to budget-conscious guests — across India.

Conclusion

With strong domestic demand and expansion strategies focused on asset-light models, hotel chains are likely to navigate short-term challenges and sustain long-term growth.

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