Hospitality Sector

Hospitality Stocks in Demand as Travel Booms

Room Rate Rises

Investor interest in the hospitaity sector is on the rise amid improving travel demand and increasing room fares. Those factor are expected to result in a stronger earning growth for the sector over the past next year. According to the latest research by the hospitality research firm HVS Anarock , revenue per available room (RevPAR) was between Rs 3,696 and Rs 3,944 in october, which was around 60% higher than the year-ago range. On the Valuation front, on a one year forward basis, the stock of Indian Hotels trades are a price book ( P/B) multiple of 5.2 . This look attractive when compared with its 3 year average P/B of 9.6. The stock of Lemon Tree hotel is available at a forward P/B of 6.6 compared with the 3 year average valuation of 7.7. The ET Hospitality Index, which covers prominent hotels has gained 9% compared with a 4.8% jump in the benchmark Nifty 50 over the past three month.