Mumbai: Hospitality sector stocks are dishing out handsome gains to investors today. Barring a select few, all hotel stocks are up sharply in positive territory, with a five of these hitting the 20% upper circuit on strong buying.
Most of these stocks have moved up on unusually strong volumes.
Taj GVK Hotels remains firmly locked at the 20% upper limit at Rs 209.40, a record high as well. On BSE, the counter has clocked a volume of 2.97 lakh shares today, as compared to average daily volume of just about 2600 shares.
On the National Stock Exchange, the Taj GVK counter has clocked a volume of about 1.85 million shares today.
Oriental Hotels, which too rose 20%, is currently up 19.7% at Rs 55.95. Royal Orchid, EIH and EIH Associated Hotels too spurted 20% before easing a bit. These stocks are currently up 19%, 17.5% and 17%, respectively.
Kamat Hotels, Viceroy Hotels, Advani Hotels, TGB Banquets and Hotel Leelaventure are up 105 - 17%. Indian Hotels is gaining 6%, Jindal Hotels and Sinclair Hotels are both higher by 5.7% and Formento Resorts is adding 5.6%. Gujarat Hotels, Blue Coast, Asian Hotels, Royale Manor, Asian Hotel (W), Phoenix Town, CHL, Speciality Restaurant, Mahindra Holiday Resorts and India Tourism Development Corporation are up 4% - 5.3%.
These stocks are up following recent data showing premium hotels' revenue per available room climbing higher by about 5% in February 2018, compared to the same month last year, thanks to growth in demand and increased tariffs.
Occupancy rate in premium hotels reportedly increased to 84% in February 2018, backed by strong foreign tourist arrivals and increasing domestic & international travelers across leisure destinations.
As occupancy ratios of hotels are expected to rise further in the coming quarters, the bottom line of the industry is likely to increase and this appears to be the main factor that is wooing investors to the counters today.