Best Hotel Stocks in India

Best Hotel Stocks in India 2024 as per Analyst Ratings

The following table mentions the best hotel stocks list as per analyst ratings. We have made the list as per these ratings provided by the I/B/E/S database, as stock market analysts run a deep analysis of the stock market before rating a stock:

Top Hotel Stocks in India in 2024 as per Market Capitalisation

The table below mentions the top hotel stocks in India according to market capitalisation:

Overview of Best Hotel Stocks in India as per Analyst Ratings and Market Capitalisation

Here is a summarised overview of the hotel industry shares in India in 2024, as per analyst ratings and market capitalisation:

1) Lemon Tree Hotels

According to the Horwath Report, among the mid-priced hotels, Lemon Tree Hotels (LTH) stands out as India's largest chain. This Indian hotel chain is known for its fresh and youthful vibe.

Currently, it operates over 100 hotels with approximately 9,700 rooms. Operating in both the upscale and mid-market sectors, which include upper-midscale, midscale and economy segments, the company runs various brands like Aurika Hotels and Resorts, Red Fox Hotels, Lemon Tree Premier, Keys Select, Keys Prima, Keys Lite, etc. 

Lemon Tree Hotels caters to metro regions such as the NCR, Mumbai, Kolkata, Bengaluru, Hyderabad and Chennai. It also serves numerous tier I and II cities like Vijayawada, Pune, Chandigarh, Ahmedabad, Jaipur, Visakhapatnam, Thiruvananthapuram, Kochi, Ludhiana, etc.

2) Chalet Hotels

Founded in 1986, Chalet Hotels Limited, part of the K Raheja Corp group, owns, develops, manages, and operates upscale hotels in major metro cities such as Mumbai, Delhi, Hyderabad, Bengaluru, and Pune. Chalet Hotel operates in various segments: real estate, hospitality (hotels), and rental business.

The company’s portfolio includes 10 operational hotels comprising 3,052 rooms, along with commercial spaces totalling approximately 1.2 million square feet near its hospitality assets. 

Most of Chalet’s hotels are operated under international brands like Marriott International and Accor. Additionally, the company has development projects underway, including hotels in New Delhi and Bengaluru, and commercial spaces in Mumbai and Bengaluru.

3) Indian Hotels Company

Established in 1899 by the founder of the Tata Group, Mr Jamsetji Tata, IHCL unveiled its 1st hotel, The Taj Mahal Palace, Bombay (now Mumbai), in 1903. Renowned as the Premier Hotel East of Suez, this venue redefined the city, showcasing authentic Indian hospitality globally and introducing international luxuries to the country.

The company and its subsidiaries mainly operate, manage and own hotels, palaces, and resorts. Its portfolio includes premium and luxury hotel brands and a variety of F&B, lifestyle brands, wellness and salons.

The company's brands consist of  Taj Sats, Ginger, ama Stays & Trails, Soulinaire,  SeleQtions, Vivanta, Qmin, Khazana, Golden Dragon, The Chambers, niu&nau, Loya, House of Nomad, Seven Rivers, etc. Its culinary and food delivery platform operates in about 24 cities through the Qmin app and has offline outlets such as Qmin Shops, Qmin food trucks, etc.

4) EIH

Incorporated in 1949, EIH Associated Hotels Limited (EAHL) owns and manages five-star deluxe and five-star hotels in major cities and tourist destinations across India. Its headquarters are located in Chennai.

EIH operates hotels under 2 brands - The Oberoi and Trident. EAHL operates hotels such as The Oberoi Cecil in Shimla, The Oberoi Rajvilas in Jaipur, and Trident hotels in Agra, Jaipur, Udaipur, Bhubaneswar, Hyderabad, Cochin, Chennai, and Gurgaon. 

Its restaurants at Trident hotels provide guests with a variety of national and international cuisines, while the bars serve foreign spirits, wines, cocktails and snacks. Moreover, EIH also provides services like management and marketing, laundry, spa, licensing of shops, etc. Currently, the company has more than 4,900 hotel rooms and has established a presence in around 24 cities across India and 7 international countries.

5) Juniper Hotels

Juniper is India's leading hotel development and ownership company established in 1985. It owns 7 hotels with 1,836 rooms including 245 serviced apartments, located across various parts of India and managed by Hyatt, a renowned global hotel operator.

Juniper’s unique collaboration between the Saraf group, a seasoned hotel developer, and Hyatt has led to the development of iconic properties like the Grand Hyatt Mumbai. 

Juniper Hotels excels in identifying hospitality opportunities, developing high-end hotels, and managing assets efficiently. Its commitment to operational excellence and guest-centric service ensures remarkable experiences for travellers. The properties of the company are situated in Delhi, Mumbai, Ahmedabad, Raipur, Lucknow and Hampi.

Factors to Consider Before Investing in Hotel Stocks in India

Here are some important factors you must keep in mind before buying hotel shares in India:

• Location

You must opt for hotel brands situated in prime locations and renowned for superior service quality. This choice maximises the location advantage and ensures a focus on top-notch service, enhancing investment potential.

• Market Trends

Understand the current trends in the Indian hospitality industry. Look at factors such as occupancy rates, average daily rates, and revenue per available room. Analyze how these trends are expected to evolve in the near to medium term.

• Financial Performance

Evaluate the financial health of hotel companies by looking at factors like revenue, profit margins, debt and liquidity. This helps you to make informed decisions about potential investments and understand the company's ability to generate returns.

• Brand Strength

If considering investing in a specific hotel chain, assess the strength of its brand. A strong brand can command higher pricing power and customer loyalty, leading to better financial performance.

• Tourism Trends

Tourism is a major driver of the hotel industry. Consider the growth potential of tourism in India, including both domestic and international tourism. Look at factors such as government initiatives, infrastructure development, and travel trends.

• Valuation

Consider the valuation of the hotel stocks. Compare key valuation metrics such as price-to-earnings (P/E) ratio, price-to-sales (P/S) ratio, and enterprise value-to-EBITDA (EV/EBITDA) ratio to industry peers and historical averages to determine if the stocks are attractively priced.

Should You Invest in Hotel Stocks?

When considering whether to invest in hotel shares in India, it is important to understand the risks that come with it. One significant risk is the sensitivity of the hotel industry to economic downturns.

During tough economic times, people tend to cut back on travel, leading to decreased demand for hotel rooms and lower profitability for hotel companies. Additionally, natural disasters can severely impact the industry by damaging properties and disrupting travel plans. 

Moreover, high competition among hotel players can lead to price wars and reduced profit margins, impacting the financial health of these companies. Furthermore, you need to consider the regulatory risks associated with investing in hotel stocks.

Hotel companies are subject to various regulations governing zoning, building codes, environmental laws and labour laws. Failing to adhere to these regulations may lead to legal liabilities, penalties and damage to the company's reputation. Therefore, before investing in hotel stocks, you must do thorough research and consider these risks to decide whether to invest or not.

The Bottom Line 

When considering buying hotel shares in India, it is essential to thoroughly analyse each company's financial performance, growth potential and other relevant factors.

By carefully evaluating these aspects, you can make informed decisions to maximise your investment returns. Furthermore, seeking advice from a financial expert can offer valuable insights and assistance in selecting hotel stocks that align with your investment objectives.