Hotel re-opening hope post Covid-19 fires up EIH, Lemon Tree, Chalet Hotels

Hotel stocks such as EIH, Indian Hotels, Lemon Tree, and Chalet Hotels were trading higher in a weak market, buoyed by the possibility of hotels reopening in the national capital after a stringent Covid-19 induced lockdown since March 2020.

According to reports, the Delhi Disaster Management Authority on Wednesday approved re-opening of all hotels in the capital besides allowing weekly markets on a trial basis. All these will resume with social-distancing guidelines and and preventive measures. 

Individually, EIH surged the most, rallying 10 per cent to hit an intra-day high of Rs 88.7 per share. Besides, Chalet Hotels soared 9.4 per cent, Royal Orchid Hotels (up 7.4 per cent), Indian Hotels (7 per cent), Lemon Tree Hotel (5 per cent), India Tourism Development Corporation (owner of Ashoka Hotel; 7.5 per cent), and Jindal Hotels (8 per cent).

Other hotel and resort inudustry stocks such as Mahindra Holiday, Country Club Hospitality Hotels, Westlife Development, Kamat Hotels, TajGVK Hotel, Asian Hotels and Oriental Hotels were up in the range of 0.06 per cent and 1.3 per cent at around 2 pm. The benchmark S&P BSE Sensex was down 383 points, or 1 per cent, at 38,210 level at this time.

The industry is expected to go for debt-recast scheme allowed by the Reserve Bank of India in its latest monetary policy announcement.

According to Hotel Association of India (HAI), if the loans are not restructured, as much as 50 per cent of the Rs 45,000 crore that branded hotel companies had taken as loans (such companies constitute 15 per cent of the 2.8 million hotels in the country) would become non-performing assets (NPAs) in the next few months.

The body has also made it plain that it does not see recovery in 30-36 months. After that it expects hotel room occupancy to reach 50-70 per cent of the pre-Covid levels. READ HERE