Hotel scrips on bull charge

Hotel stocks such as East India Hotels, Indian Hotels and ITC Hotels have provided returns of between 2.33 per cent and 217.54 per cent, outperforming the BSE Sensex which has fallen three per cent since the start of the year.

Of the 28 hotel stocks, which were surveyed, as many as 25 had outperformed the Sensex, which fell three per cent from 6679.20 to 6478.90 from January 3, 2005 to May 19, 2005.

Out of the 25 Sensex outperformer, as many as 23 hotels stocks notched up positive gains during the period under review. Only five hotel stocks gave negative returns out of which only three stocks fell by a larger quantum than the Sensex.

Hotels are reporting improved quarterly results due to improved occupancy rates and increase in tariffs.

With the paucity of hotel rooms on one side and increase in demand due to growth in the tourism sector, occupancy levels have been rising leading to higher average room rents (ARR).

According to the World Travel and Tourism Council, India's travel and tourism demand is expected to grow at an annual rate of 8.8 per cent in the next 10 years.

Advani Hotels was the biggest gainer rising a big 217.54 per cent, from Rs 19.10 to Rs 60.65 while Up Hotels was the second biggest gainer rising 132.76 per cent from Rs 38 to Rs 88.45.

Other big gainers included Sayaji Hotels which rose 131.63 per cent from Rs 11.57 to Rs 26.80, Gujarat Hotels which jumped 83.81 per cent from Rs 25.57 to Rs 47 and Ras Resorts which rose 73.59 per cent from Rs 7.46 to Rs 12.95.

Among the well known names, EIH Assoc Hotels rose 51.78 per cent from Rs 61.90 to Rs 93.95, Taj GVK Hotels gained 34.57 per cent from Rs 309.10 to Rs 415.95, EIH gained 33.70 per cent from Rs 281 to Rs 375.70, Hotel Leela rose 29.17 per cent from Rs 157.20 to Rs 203.05, Indian Hotels jumped 16.35 per cent from Rs 541.45 to Rs 630 and ITC Hotels rose 4.91 per cent from Rs 153.90 to Rs 161.45.

The worst performing hotel stock was Khyati Resorts which plummeted 29.55 per cent from Rs 0.44 to Rs 0.31 while the second biggest loser was Capital Hotels which lost 10.95 per cent from Rs 11.23 to Rs 10.

The only other Sensex underperformer was Best Eastern Hotel which fell 3.78 per cent from Rs 37 to Rs 35.60.

Two stocks which outperformed the Sensex but nevertheless gave negative returns were Asian Hotels which fell 0.59 per cent from Rs 328.95 to Rs 327 and Jaypee Hotels which lost 0.55 per cent from Rs 45.25 to Rs 45 during the period under review.