In­vestors Check into Ho­tel Stocks, Again

The Economic Times - - Markets + Finance -

Num­bers (mil­lion) one month, but stocks of ho­tel com­pa­nies like the In­dian Ho­tels, EIH and Leela Ven­tures have gained only 13-25%.

Even though hos­pi­tal­ity com­pa­nies have limited rev­enues and growth vis­i­bil­ity in the near term, they can re­ally take off. And an in­ter­est­ing thing about these com­pa­nies is their at­trac­tive val­u­a­tions at cur­rent rates. At present, all pre­mium ho­tels com­pa­nies, In­dian Ho­tels, East In­dia Ho­tels (EIH) and Ho­tel Leela Ven­tures, are trad­ing be­low their 10-year aver­age priceto-book value of 2.2, ac­cord­ing to data pro­vided by Bloomberg.

Go­ing by the last 22 years’ trend, the ho­tel in­dus­try fol­lows an 8year cy­cle, which cov­ers the best and rel­a­tively weak pe­ri­ods of busi­ness. The worst four years in the cur­rent cy­cle are be­hind for the in­dus­try and this time the ex­pec­ta­tions are high.

In­dia

6.8

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