Mumbai, Nov. 22: A feel-good factor in the hotel industry following improved occupancy rates and a scaling down of travel advisories on India by the US lit up the Indian Hotels and East India Hotels scrips today.
The EIH counter was also driven by reports that tobacco major ITC Ltd was planning an open offer. If ITC, which has acquired a 14.3 per cent stake in EIH, decides to make an open offer for another 20 per cent stake in the company, its success will mainly revolve on which way the financial institutions go. The FIs roughly hold 24 per cent in East India Hotels.
Reports show that occupancy levels in luxury hotels in major cities and leisure destinations like Goa, Kerala and Rajasthan have gone up substantially, thus giving credence to hopes of a higher business revenues in the short term.
Moreover, the US yesterday relaxed travel advisories to the sub-continent as tensions between the India and Pakistan eased considerably after the elections in Kashmir—factors all reflected in the rise of the hotel scrips today.
Indian Hotels gained a whopping 13.20 to Rs 161.35 from its previous close of Rs 148.15. East India Hotels gained Rs 5.20 at Rs 195.25 from its earlier close of Rs 190.05 while Hotel Leela gained a modest 20 paise to end the day at Rs 15.10.
ITC Hotels added Rs 3 to its overnight close of Rs 37.75 and closed at Rs 40.75. Most hotel scrips had made impressive intra-day gains before profit booking saw part of the gains being wiped off, especially in the case of EIH.
Analysts expect the relaxation of advisories by the Western countries to have a favourable impact on profits. The current discounts on rooms are also expected to be scaled down following the rise in tourist arrivals from developed countries.