The Hindu Business Line : Check out from hotel, airline stocks

Indian Hotels Company crashed by 17 per cent (or Rs 8.25) to end the day at Rs 40.20 against the previous day’s close of Rs 48.45. Hotel Leela Venture fell 3.6 per cent at Rs 17.45 (Rs 18) while Advani Hotels Resorts (India) plummeted by 18 per cent at Rs 26.45 (Rs 32.3).

However, EIH Associated Hotels and EIH recovered from day’s low to end in positive territory. While the former finished 1.96 per cent higher at Rs 59.8 (Rs 58.65), the latter jumped 5.22 per cent to close at Rs 97.75 (Rs 97.20).

Taj GVK Hotels ended on a flat note at Rs 44.8.

Terrorists armed with grenades and rifles stormed into the Taj Mahal Palace and Oberoi Hotel late on Wednesday.

While Indian Hotels Company operates Taj Group of Hotels, EIH operates Oberoi Group of Hotels.

Aviation stocks — Jet Airways, Kingfisher Airlines and SpiceJet — also tumbled on the back of these developments.

Jet Airways, Kingfisher Airlines, and SpiceJet fell by 5-7 per cent on fears of slowdown in tourist arrivals.

Slow down ‘likely’

Edelweiss, in its report following the terror attack, said, “Foreign tourist inflows are likely to slow down. Western countries have either issued travel advisories or cautions. Overseas clients, such as those of Indian IT companies, may postpone their visits but this may not have much impact since business travel to outsourcing destinations is anyway low due to holidays in the Western world.”

An analysis by India Infoline on the hotel sector said: “Hotel sector Q2 results indicate demand slowdown on the back of moderation in both global and domestic economic activities in first half of the current fiscal. H1 occupancies declined about 100-600 basis points year-on-year in metros such as Mumbai and Delhi while ARRs grew at a slower pace of about 15 per cent year-on-year in major business destinations. Operating margins declined as staff and fuel expenses mounted especially for smaller companies like Hotel Leela and TAJGVK.”

According to Mr Madhavan Menon, Managing Director of Thomas Cook India, “The impact of these incidents will be two-fold. If the countries issue travel advisories against India, travel insurance premium to India will go up across the world and hit travel to the country. Secondly, multinational corporations with operations in India might also restrict travel of their employees, if not for long then at least next few days.”

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