Best Hotel Stocks in India to Buy in 2023

12 January 2023
6 min read

Experts predict that the Indian Hospitality Sector will experience the world's fastest rate of hotel growth. It is anticipated that the industry could be worth a staggering USD 300 billion in the upcoming years, with growth prospects expected to be reasonably constant over the next ten years. Furthermore, the Hotel Stocks are anticipated to outperform as India's tourism sector expands.

In this blog, we have listed the top Hotel Stocks in India, an overview of their performance, and the factors you should remember before investing in Hotel Sector Stocks.

Best Hotel Stocks in India 2023

Let us review the top Hotel Shares in India now that we have a better understanding of this industry.

S.No.

Hotel Stocks List

1.

Indian Hotels Company Ltd.

2.

EIH Ltd.

3.

Byke Hospitality Ltd.

4.

Chalet Hotels Ltd.

5.

Lemon Tree Hotels Ltd.

Factors to Consider Before Investing in Hotel Industry Shares

Following are some of the factors to consider before investing in stocks of listed hotel companies in India- 

Heavy Reliance on Place, Economic Conditions & Competitive Pressure

The dependence of these investments on the economic system, the location of the actual property and the presence of nearby competition is one potential drawback of being a hotel investor.

Most hotel visitors are probably leisure travellers, so they must have enough extra cash to indulge in such luxuries. As a result, hotels may see a significant drop in the number of visitors they can draw and the prices guests are prepared to pay during tough economic times.

Its location significantly influences a hotel's popularity. Even places with a reputation for being popular with tourists can experience popularity swings that are sometimes beyond your control. In addition, it is possible that a nearby rival will establish itself or an already-existing opponent will create a more tempting offer, which could drive clients away from your hotel.

You may also want to know Why Does Your Portfolio Need Hospitality Sector Stocks?

Depending on Efficient Administration & Governance

The dependence of hotel investments on successful hotel management and wise operational decisions is another potential problem that hotel investors may have to deal with.

The focus should be on keeping up with industry trends and investing enough in cutting-edge hotel technology. Competitors will likely benefit if an estate falls behind them in aspects of the software and equipment used by staff or the technology offered to visitors. After all, visitors will favour the establishment that provides a seamless, contemporary, frictionless experience.

Hotel investors should always consider a hotel's physical location as just a hotel set. However, a hotel's success or failure depends on its service level and the strategic choices it makes. This means it is crucial to have a strong management team and for all hotel departments to work together.

Heavily Leveraged Capital Threat

As this can increase the possibility of higher returns, numerous hotel investors are enticed to borrow sizeable sums of money for their investments. However, there is a chance that the hotel could end up with too much debt.

If a hotel's debt grows to the point where it cannot pay its interest and operating costs, it is said to be over-leveraged. Borrowing more increases your risk of paying higher interest rates, which increases your chance of losing money on investments.

You will need money to invest in your asset if a hotel begins to experience operational problems, which bring on a variety of external factors can bring general which may be difficult to predict or control. This will not be possible if you overleverage and lose your hotel property.

Top India Hotel Stocks: An Overview

1) Indian Hotels Company Ltd.

Indian hotels stock is one of the most popular choices in the list of hospitality sector stocks. This is because various brands and companies offer warm Indian hospitality and top-notch service under the umbrella of the Indian Hotels Company Limited (IHCL) and its subsidiaries.

These include Vivanta, chic, upscale hotels; SeleQtions, a named hotel collection; and Ginger, revolutionizing the lean luxe market. Of course, Taj is the epitome of iconic hospitality.

Jamsetji Tata, the founder of the Tata Group, founded the company, which debuted in 1903 with the opening of The Taj Mahal Palace in Bombay. IHCL has 196 hotels in its portfolio, 40 currently under construction worldwide across 4 continents, 12 countries, and more than 80 locations.

According to market capitalization, The Indian Hotels Company Limited (IHCL) is the largest hospitality company in South Asia.

2) EIH Ltd.

The Oberoi Group, one of India's biggest chains of luxury hotels, is led by EIH Limited. The Oberoi, Trident, and Maidens hotels—three well-known brand names—are all operated by them. They have gained devoted clients and acknowledgement from the international hospitality industry thanks to their individualized service, dedication to excellence, and detail.

They are strongly committed to implementing the top corporate social responsibility strategies into their operations. EIH Associated Hotels Limited (EAHL) is a member of one of India's most prestigious and well-known hospitality business groups. The group now owns and operates 10 five-star hotels under the Trident Hotels brand and 20 extraordinary hotels under the luxury Oberoi Hotels & Resorts umbrella.

3) Byke Hospitality Ltd.

The Byke Hospitality Ltd., one of India's quickest-growing hospitality groups, has 21 hotels with 1,255 rooms, India's presence in 09 states and 16 cities. Travellers seeking a cosy treat frequently choose The Byke because of its distinctive Pure Vegetarian Hotels & Resorts theme.

They provide modern hospitality services with a nod to the ‘Atithi Devo Bhavah’ maxim found in traditional Indian culture. With years of experience, Bhavah'team is dedicated to giving our customers the best possible stays for both business and pleasure.

Given TBHL's strategic advantages, the stock price has not yet reached its potentiTBHL'sh. Compared to its peers, the above chart only shows 20% returns over the past year, leaving room for a significant investment opportunity. TBHL is one of India's top hotel stocks to consider purchasing.

4) Chalet Hotels Ltd.

Chalet Hotels Limited, a K Raheja Corp Group subsidiary, runs seven five-star hotels in Mumbai, Hyderabad, Bengaluru, and Pune. Chalet Hotels Limited owns renowned brands like Marriott and Four Points in Mumbai and Bengaluru. In the last few years, Chalet Hotels' stock price increased significantly. As a result, it will stand to gain prominence from India's impending tourism boom. Therefore, your returns can dramatically improve by including a solid stocIndia'sCHL in your portfolio.

5) Lemon Tree Hotels Ltd.

According to the Horwath Report, Lemon Tree Hotels (LTH) is India's third-largest chain overall as of June 30, 2017, and its largest chain in the mid-priced hoteIndia'stry.

This distinguished Indian hotel chain has 87 establishments in 52 locations, 8,400 rooms, and over 8,000 staff members. Lemon Tree Hotels Limited owns hotels ranging from Super Luxury to Economy in more than 87 locations throughout India.

In other words, Lemon Tree Hotels serve a diverse group of clients from all social classes, and their clientele is not just limited to high-end travellers. Moreover, according to the graph above, the share price of Lemon Tree has increased significantly over the past few months. Therefore, it is a good buy for you, given the operational scope and clientele of Lemon Tree Hotels.

Conclusion

The hotel industry is one to keep an eye on in the coming months because demand is anticipated to be strong during the upcoming holiday season, and occupancy rates are also rising. Additionally, there are anticipations of corporate action as stalled or locked-up inventory will eventually be put up for sale.

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Disclaimer: This blog is solely for educational purposes. The securities/investments quoted here are not recommendatory.

To read the RA disclaimer, please click here
Research Analyst - Bavadharini KS

Disclaimer

The stocks mentioned in this article are not recommendations. Please conduct your own research and due diligence before investing. Investment in securities market are subject to market risks, read all the related documents carefully before investing. Please read the Risk Disclosure documents carefully before investing in Equity Shares, Derivatives, Mutual fund, and/or other instruments traded on the Stock Exchanges. As investments are subject to market risks and price fluctuation risk, there is no assurance or guarantee that the investment objectives shall be achieved. NBT do not guarantee any assured returns on any investments. Past performance of securities/instruments is not indicative of their future performance.
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