Hotels, Restaurants & Tourism share price target

As per HVS Anarock, Feb’23 was another strong month with hotel industry RevPAR of ~Rs5,900 being 13% above Feb’19 (pre-Covid) levels. A key highlight for Feb’23 was that pan-India hotel occupancy crossed 70%, the first time since the onset of Covid in Feb/Mar’20. The Mumbai market saw Feb’23 ARRs crossing the Rs12,000 mark, while Goa and New Delhi also recorded Feb’23 ARRs in excess of Rs10,000.

As per HVS Anarock, Jan’23 was another strong month for the Indian hotel industry with industry RevPAR being 7% above Jan’20 (pre-Covid levels). Mumbai continued to clock the highest occupancies of over 80% for Jan’23 at an ARR of over Rs11,000 (same as Dec’22) while Goa clocked the highest ARR across India of over Rs12,000.

The third quarter of the financial year, with its many festivals and weddings, is usually a strong one for the hotels industry. And this year didn’t disappoint – the hotels in focus reported robust growth in revenue and net profit in Q3FY23. Rising leisure travel, revenge tourism and improving corporate travel and events helped drive growth during the quarter.

As per HVS Anarock, Dec’22 was another strong month for the Indian hotel industry with industry RevPAR being 13% above Dec’19 (pre-Covid levels). Mumbai continued to clock the highest occupancies of over 80% for Dec’22 while Goa clocked its highest ever ARR of over Rs13,000 which is 31% higher than Dec’19 levels.

In this report, we map price of Starbucks (latte), Zara (men shirts) and Domino’s (regular-size pizza) globally (in their respective top 3-5 markets) to understand how their pricing strategies (premium/discount) differ in the respective geographies.

As per our channel checks and commentary from listed hotel companies, hotels continue to follow a strategy of keeping rates higher and sacrifice a bit of occupancy in preparation for a strong “wave” of demand in H2FY23.

Traditionally, July to September is the weakest quarter for the hotel industry, as it is typically the off-season for tourists. Summer vacations are over, and monsoon rains discourage travel.

As per our channel checks and commentary from listed hotel companies, hotels continue to follow a strategy of keeping rates higher and sacrifice a bit of occupancy in preparation for a strong potential demand surge in H2FY23.