2023 was a promising year for the tourism and travel sector on the back of a resurgence in Indian tourists wanting to explore the country and the world. The Indian hospitality sector had a huge disruption during the COVID-19 phase but has surged back to life in 2023 with doubledigit growth.
This uptick has been on the back of growth in travel and domestic tourism, the G20 summit, ICC World Cup World Cup, M.I.C.E events (meetings, incentives, conferences and exhibitions). There is no doubt that the tourism and hospitality industry has survived and thrived after COVID-19 to become a force in the services sector.
Not only is the industry creating jobs but contributing significantly to the national exchequer. The hotel industry saw its business surpass record levels after a gap of nearly 2 years by posting stupendous growth. The hotel industry saw an increase in revenue from increasing occupancy and increasing room rates.
Industry Analysts attribute this to not just the change in mindset of the Indian traveller but to the Improved infrastructure providing a huge fillip and impetus to the industry. The contribution by the travel and tourism industry to the country’s GDP was USD 170 8 billion in 2021 and analysts are expecting this to climb substantially higher to reach USD 500 billion over the next five years.
The Indian government is leaving no stone unturned by creating a robust infrastructure by building highways and airports at a faster pace for intercity connectivity and commutation, modernisation railway stations, developing homestay in rural areas, promoting spiritual tourism and advancing the country’s diversified and cultural background to the Indian and global traveller.
Among many programs implemented by the government to boost the industry, the Digital India program has swung the demand in favour of the tourism and hospitality sector through technological advancement, robust digital infrastructure and innovation in technology, embraced by start-ups and Indian companies.
Last 2 years have been very good for hotel stocks and Indian bluechip hotel companies like Indian Hotels (Taj Group), EIH Hotels (Oberoi Group), and ITC Hotels (ITC Group) apart from the large foreign conglomerates like Marriott, IHG, etc with them posting superlative growth in revenue and profits.
Apart from the bigger names, there is a hotel chain headquartered out of Kolkata, Sinclairs Hotel and Resorts Ltd. It has a unique chain of 9 properties for the business and leisure traveler across Siliguri, Kalimpong, Gangtok, Port Blair, Ooty, Burdwan, Yangang, Darjeeling and Dooars.
The promoters have a high stake of 62.78% in Sinclairs Hotel reflecting their confidence in the company with zero shares being pledged. With a total room inventory of 447 rooms spread over nine locations, Sinclairs is well diversified across the country. The company has excellent financials with its equity capital at ₹5.43 crores and a net worth of Rs 125.05 crores.
Sinclairs is completely debt-free and has a cash surplus of over Rs 100 crores on its books, ensuring healthy profits and consistent dividend payout for the last 14 years. It has rewarded its shareholders with Rs 102.43 crores in the form of dividend and buyback of shares since 2009. The company has recently completed its third buyback of 15,20,000 equity shares of face value Rs 2 each at a price of Rs 200 per equity share under the tender offer process for a total payout of Rs 30.40 crores.
The future of the Indian hotel industry is extremely bright with Sinclairs looking to expand significantly and become a larger player by leasing or acquiring properties through the solid cash balance it has of over Rs 100 crores in its books.
The Sinclairs Hotel and Resorts share price currently quoting on the bourses at Rs 210 is being recommended by industry analysts for a period of one-year time frame with a 35% price appreciation visibility.