Hotel Stock Prices Analyzed

The price of hotel rooms in big cities like Mumbai and Delhi is likely to keep going up over the next five years. However, in smaller cities, the prices might stay the same or even drop. This is based on a study by YES Securities, which looked at how much demand there is for hotels compared to how many new hotels are being built.

Key Points

• Hotel room prices in major cities will likely increase.
• Smaller cities may see price stagnation or decreases.
• New hotels are being built slower than people want them.
• Strong demand for hotels is driving up prices.
• Hotels are getting more money for their rooms without losing customers.
• Luxury hotels could perform well despite overall supply growth.

YES Securities believes that hotels are doing well because people are traveling more, there aren’t enough new hotels, and hotels are charging more for rooms. This means that hotel companies can make more money and their prices will likely go up in the long run.

YES Securities has picked four hotel stocks they like: Lemon Tree Hotels, Chalet Hotels, PARK Hotels, and SAMHI Hotels. They think these companies will do well. They also have neutral ratings on Indian Hotels Company and EIH, meaning they don’t think these companies are particularly good or bad investments.

Overall, the study says that demand for hotels is growing faster than the number of new hotels being built. This is especially true in big cities. Because of this, hotels can charge more for their rooms and make more money. This is a good thing for hotel companies.

“Demand trends are expected to remain robust over FY25-30E with growth expected at 10.4 per cent CAGR, higher than supply growth at 8-9 per cent CAGR.”