Covid-19 impact: No comfort in hotel stocks as recovery pushed to FY23

Expectations of a slow recovery, high fixed costs and debt worries are putting off investors

Hotels have been one of the worst-affected sectors amid the Covid-19 pandemic and the same is reflected in the stock prices. Even as the market recovered in April, the BS Hotel index, which measures the performance of top hotel stocks, lagged by a significant margin. While the Sensex gained 21 per cent since March 23, the BS Hotel index fell 7 per cent over the same period.

The reason for this underperformance is the apprehension that recovery could stretch to two years, one of the longest durations across sectors. The delay is on account of a gradual recovery from zero