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Indian Hotels, ITC Hotels, EIH Ltd and Lemon Tree Hotels tumble up to 7% today; here’s why
2 min read | Updated on April 25, 2025, 15:31 IST
SUMMARY
Hotel stocks fall up to 7% amid high cancellations after the Pahalgam terror attack. Indian Hotels, Lemon Tree, and ITC Hotels declined up to 7% as Jammu and Kashmir tourism witnessed substantial tourist arrivals in the last few years.
J&K saw a nearly 10-fold jump in tourists to over 3 crore visitors in 2024.
Hotel stocks were in the spotlight today as shares of Indian Hotels, ITC Hotels, and Lemon Tree Hotels declined between 4 and 6% intraday amid travel and hotel reservation cancellations in J&K after the Pahalgam terror attack on April 22.
In the last few years, Jammu and Kashmir (J&K) tourism has witnessed a substantial rise in arrivals. As per the J&K tourism website, the region saw 34.7 lakh visitors in 2020 which jumped to 2.1 crore in 2023. While visitors are expected to be over the 3 crore mark in 2024, making J&K top destination for domestic and foreign visitors.
Multiple hotel chains like Indian Hotels, Lemon Tree Hotels and Chalet Hotels operate properties in the J&K region. However, these companies are witnessing up to 90% cancellation after the April 22 attack. As a result, hotel stocks saw subdued investor sentiment as J&K tourism is likely to be impacted in near future.
List of major hotel stocks trading lower
| Stock | Today’s change* |
|---|---|
| Indian Hotels | 788 ▼ 30 (-3.7%) |
| ITC Hotels | 194 ▼ 5.6 (-2.8%) |
| EIH Ltd | 382 ▼ 9.3 (-2.3%) |
| Juniper Hotels | 285 ▼ 4.9 (-1.6%) |
| Lemon Tree Hotels | 139 ▼ 5.6 (-3.8%) |
| Samhi Hotels | 183 ▼ 9.3 (-4.8%) |
View on the hospitality sector
Despite today’s fall, credit rating agency India Ratings and Research (Ind-Ra) continues to have positive outlook on the sector. As per report, the hotel sector's revenue per available room (RevPAR) is expected to remain strong in FY26, similar to FY25, but near its peak.
According to the report, occupancy rates are expected to be supported by ongoing business events, international gatherings, and leisure travel, despite potential economic slowdowns due to prolonged trade war concerns. The report further noted that Ind-Ra rated hotel companies had occupancy rates of 70%-73% in 2HFY25, which are expected to remain steady in FY26.
Ind-Ra also stated that the balance sheet leverage of the Indian hospitality sector has improved significantly in recent years, driven by strong cash flow generation, deleveraging efforts, and disciplined capital expenditure. Many hotel companies have reduced their debt post-COVID, benefiting from enhanced profitability, asset monetisation, and equity fund raises.
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