Cricket World Cup, G20 summits to drive growth for hotel companies
ICC Cricket World Cup 2023 and G20 summits in India are poised to bolster the earnings of the hospitality sector in the country and this probably reflected in the sharp rally of shares of many hotel companies.
The Cricket World Cup starts from October 5 and ends on November 19, comprises 48 matches across India, with the finals slated to be held at Ahmedabad. The G20 summits will also held in the same month. India assumed the G20 presidency for the first time for the period December 1, 2022 to November 30, 2023. The 43 heads of delegations will be participating in the final summit to be held in September.
The increased earnings are likely to reflect in the third and fourth quarters of the current financial year.
“The hosting of G20 events and ICC Cricket World Cup matches is expected to create a substantial surge in demand for accommodation and hospitality services. Hotels situated in these cities will enjoy maximum advantages as venue locations, attracting domestic and international tourists. As a result, the demand for branded hotel rooms is expected to skyrocket, putting a strain on the available supply,” Nandivardhan Jain, Founder & CEO NOESIS Capital Advisors, said in The Hotelier India.
“This scarcity of supply will likely lead to a significant increase in room rates and coupled with the robust demand, ensure higher occupancy levels. Hotels in these cities can capitalize on this advantageous situation to maintain pricing levels and secure strong profitability,” he added.
Shares of hotel companies have surged in the range of 25% to 105% in the past six months, according to statistics gleaned from the National Stock Exchange (NSE). Asian Hotels was up 105.65% while the lowest gainer was Lemon Tree Hotels at 24.50%. Indian Hotels Company Ltd. (IHCL) that manages the Taj group of hotels has gained 36% while EIH Hotels (Oberoi Group) is up 33%. The gains are on the basis of share price at the closing session on the NSE on Wednesday (July 26).