Top Hotel Stocks to Buy Now in India 2024

The hospitality or the hotel sector in India is rich with heritage and history, with some infrastructure facilities several hundred years old. India’s hotel industry has continuously evolved and also tried to balance modernity with tradition. Despite facing past challenges, the hotel sector has remained vibrant and continues to grow

Take the example of Indian Hotels Ltd. It is one of the largest hotel stocks in India by market capitalization. Despite challenges in the sector, its stocks have grown by 366 percent over the past five years, from August 2019 to August 2024

The EIH Ltd, the second biggest hotel stock in India grew by 136 percent in the same duration of five years. The Mahindra Holidays & Resorts India Ltd, a popular hotel stocks grew by 182 percent. The resilience of the hotel sector is rooted in the simple fact that India is a land of diverse cultures and landscapes offering so much to the visitors. Also, Indians love to travel. In fact, India has the highest number of domestic leisure travelers in the entire world!  That’s not all. India also attracts travelers from across the globe. We are home to – 

• 37 world heritage sites,
• 80 national parks, 
• 441 sanctuaries and hundreds of beaches. 

Our foreign travelers grew by 24% y-o-y between 2016 and 2019. But the pandemic of 2020 reduced the number of foreign travelers to 2.9 million till March 2020. However, things are back on the track now. In 2021, the number of foreign travelers in India increased to 4.6 million.

In FY 2020, the size of the Indian hotel market was US$32 Billion. This is expected to increase to US$ 125 Billion by FY 2027.  So, the hotel sector is expected to grow at an annual rate of 21% in a period of seven years. And who will benefit from this growth? Of course, the hotel stocks!  And the markets seem to have worked this out. 

While investing in hotel stocks is indeed tricky and always prone to global disorders, there is some good news. The hotel business also offers great investment opportunities. I mean the biggest driver of the Indian hotel business is our government! And rightly so. 

• Do you know that the hospitality and tourism industry contributed nearly US $98.2 Billion to our GDP in 2018? Yes, and this is expected to increase to US$ 194.7 Billion by 2028.

• In 2019, the earnings from the hospitality and tourism industry hit a lifetime high of US$ 30.06 Billion.  

Now obviously the government will try to increase their earnings from the hospitality and tourism industry. So, it has approved 100% foreign direct investment in tourism construction, development of hotels, resorts etc. Some of the other initiatives include a tie-up with e-commerce travel companies like Easy Trip Planners Ltd., Yatra.com, and Cleartrip etc.   Some popular initiatives planned by the government to grow the hospitality and tourism industry –

Hotel Industry in India 

The hotel industry in India is divided into the following segments – 

• The Independent / Unbranded hotels, that accounts for 70% of the total available hotel rooms. 
• The Alternate accommodations like homestays, farm stays which are increasingly becoming more popular.  
• The New-age hotel chains. This is the fastest growing segment of the hotel industry. It is expected to grow from 7.36% in FY 2018 to 14.80% in FY 2024. 
• The Traditional or Branded hotels, whose share has declined to just 5% of the total available hotel rooms. 

The two key parameters used to measure the success of the hotel industry are: 

1. Average Room Rate (ARR) 
2. Revenue per Available Room (RevPAR) 

The graph below shows the trends in the ARR and RevPAR of the Indian hotel industry.

Between FY 2020 and FY 2024, the ARR of the hotel industry is expected to grow at a compounded annual growth rate of 3.16%. Even the RevPAR is expected to grow at 5.80%.  With positive growth trends, hotel stocks might hold some interesting investment opportunities. Now, there are a total of 54 hotel stocks listed in the market. 

List of Hotel Stocks in India

*Data as on 9th August 2024

We will be taking a look at the top 5 hotel stocks as per market capitalization. Let’s start with the biggest hotel stock as per market capitalization – Indian Hotels Co. Ltd. 

Hotel Stock #1: Indian Hotels Co. Ltd 

The Indian Hotels Co. Ltd comes from the trusted Tata Group of companies. They have been in the hotel business for more than 116 years. Some of their popular hotels include the iconic TAJ and Vivanta among others. This hotel stock is present in 10 countries and 93 locations in India. 

Indian Hotels Brands

Source: Annual Report There has been a steady increase in the company’s net profit. Between 2018 and 2020, their net profit jumped from Rs 101 crore to Rs 354 crore. Want to know an interesting fact? In the December 2021 quarter, the promoters increased their stake in this hotel stock from 40.75% to 41.05%.  In the last one year, the share price of Indian Hotels Ltd. is up by 59% (as of August 9, 2024)

Here are the key financials of Indian Hotels Ltd. as of August 9, 2024

Hotel Stock #2: EIH Ltd. 

EIH Ltd is the second biggest hotel stock in India. It has a market capitalization of Rs 24,379 crore (as of August 9, 2024). It owns luxury hotels like the Oberoi and the Trident in Mumbai. It also provides in-flight catering and airport restaurant services. They manage a total of 32 hotels under the EIH Ltd group.

Oberoi and the Trident EIH Ltd has been showing good growth trends since 2012. In the last 10 years, it posted loss in only 2021, owing to the pandemic. Its profit grew from Rs 132 crore in March 2019 to Rs 149 crore in March 2020.  The company’s stock price is up by 79% in the last one year (as of August 9, 2024).  Here are the key financials of EIH Ltd. as of August 9, 2024

Hotel Stock #3: Chalet Hotels Ltd. 

Chalet Hotels Ltd. is the proud owner of the JW Marriot Group and the Westin chain of hotels in India. This company is promoted by the K Raheja Group and is involved in the hospitality and real estate development. The company is going to invest Rs 660 crore in FY 2022-23 for building commercial projects. This hotel stock has rallied by 57% in the last one year (as of August 9, 2024).

Here are the key financials of Chalet Hotels Ltd. as of August 9, 2024 

Hotel Stock #4: Barbeque Nation Hospitality Ltd. 

We have all heard and probably even eaten the lavish buffet spreads at Barbeque Nation. It is one of the fastest growing hotel chains in India.  As of March 2020, Barbeque Nation has 150 restaurants across 77 cities and towns in India. This hotel stock is fairly new to the hotel sector. It listed for trading on April 09, 2021 at Rs. 489.85 per share.

 Here are the key financials of Barbeque Nation Hospitality Ltd. as of August 9, 2024 

Hotel Stock #5: Lemon Tree Hotels Ltd. 

Lemon Tree Hotels Ltd. is the third largest hotel chain in India. It operates a total of 84 hotels spread across 50 Indian cities. It also operates two international hotels, one in Dubai and the other in Bhutan. It dominates 17% of the branded mid-sized market hotels in India. This mid-cap hotel stock is up by 20% in the last one year (as of August 9, 2024).

Here are the key financials of Lemon Tree Hotels Ltd. as of August 9, 2024 

This concludes our discussion on the top hotel stocks in India. The hotel industry in India is expected to compound at 13% to reach a value of Rs. 1,210 Billion by the end of 2023. Do you want to be a part of this growth? You can do so by investing in hotel stocks. But before you invest in hotel stocks, you must first check the stock’s rating on Samco Stock Page.  Open a FREE Demat account with India’s best broker Samco Securities now to enjoy best in class trading and investment ideas