Good times for hospitality sector due to ongoing G20 and sports events

While discretionary spending is getting pulled back, but at least as of now the number of check-ins are outweighing the checkouts, particularly for the hotel industry. One of the triggers that is supporting this one is the ongoing G20 event so the occupancies are higher.

The other factors contributing to higher occupancies are big sporting events like Cricket World Cup later this year and IPL while corporate travel has also picked up. However, international travel is yet to pick up, it is only at around 40-50 percent of what it normally.

The revenue per available room for last three months for the industry on the whole of October, November, and December, has seen a big increase and most hotel companies say demand is far better in comparison to supply. Demand outstripped supply is always good news for the industry.

Indian Hotels have delivered the best ever results in the past quarter and they are firing both on the ARR as well as on the occupancies.

Chalet Hotels are not really there in terms of occupancies but operating leverage is playing out, which indicates the revenue per room have really gone up.

EIH quarterly occupancy also looks very good.

At Lemon Tree, the occupancy is still not at peak but the company has delivered the best results on all fronts - revenue, EBITDA, profitability and is also bracing for the time ahead, because it is adding a good amount of hotels and rooms as well.

For the time being, it appears there are enough triggers to support the hotel industry, at least for the next couple of years. The only problem is if things get a little bit dicey, will there be a toss-up between ARR and occupancy, but for now, it seems the number of check-ins are way more than the number of checkouts.