Profits Surge for Hotels and Airlines During Maha Kumbh
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Synopsis
The Maha Kumbh mela has significantly boosted profits for the hospitality and airline sectors. Notably, Benares Hotels' stock has seen a remarkable rise, reflecting the increased demand. Airlines are also benefiting from soaring airfare prices to key destinations during this period.
Key Takeaways
- Maha Kumbh boosts profits for hotels and airlines.
- Benares Hotels shares rose by 11.50%.
- Airfares to Prayagraj have skyrocketed.
- ICRA predicts 7-9% revenue growth for hotels.
- Domestic tourism remains a strong driver.
New Delhi, Jan 29 (NationPress) The Maha Kumbh mela has emerged as a significant advantage for the hospitality industry and airlines, with profits projected to strengthen due to the escalating demand. This trend is evident in the climbing share prices of firms like Benares Hotels, which is a part of the Tata Group’s Indian Hotels.
On Wednesday morning, the share price of Benares Hotels Ltd surged to Rs 10,610.00 on the BSE, marking an impressive 11.50 percent rise from the previous closing price of Rs 9,552.95 on Tuesday.
Despite a downturn in the BSE Sensex and the smallcap sector, the stock price of this smallcap hotel firm continues to climb.
Benares Hotels Ltd operates the Taj Ganges and Taj Nadesar Palace in Varanasi, along with Ginger in Gondia, Maharashtra. The ultimate holding entity for Benares Hotels is the Indian Hotels Company Limited (IHCL).
For the third quarter (October-December), Benares Hotels reported a 20 percent year-on-year increase in net profit, totaling Rs 13.6 crore. The company also experienced a 16.2 percent rise in revenue, amounting to Rs 40.1 crore during this period.
The surge in domestic demand attributed to the Kumbh Mela and related travel activities in the area is expected to boost revenue significantly.
Airlines are also reaping benefits from the heightened demand, as airfares have increased dramatically during the Maha Kumbh period.
Airfare from major cities to Prayagraj has skyrocketed. For instance, ticket prices for flights from Delhi to Prayagraj have jumped to ₹20,000 or more, up from ₹5,000 previously. Meanwhile, flights from Mumbai to Prayagraj are priced between ₹20,000 to ₹56,000.
A non-stop flight from Delhi to Prayagraj with Akasa Airlines will cost ₹24,262, while Air India charges ₹28,739 for the same route. Flights with layovers are even pricier.
SpiceJet’s direct flight tickets from Mumbai to Prayagraj start at ₹20,482.
Additionally, direct flights from Hyderabad to Prayagraj were fully booked until the end of February, pushing travelers to opt for connecting flights. The quickest route, which includes a one-hour layover in Mumbai, lasts five hours and costs ₹28,901 for January 29. The fare rises to ₹36,901 on January 30.
Furthermore, an ICRA report has indicated that the Indian hotel sector is on track for a 7-9 percent revenue increase in FY2025, propelled by robust domestic leisure travel demand alongside events like weddings and business travel.
ICRA anticipates occupancy levels to reach decadal highs, with tier-II cities and spiritual tourism playing a crucial role.
While domestic tourism is a primary driver, foreign tourist arrivals still need to recover fully post-Covid, depending on the global economic situation.
ICRA predicts that premium hotel occupancy will peak at around 70-72 percent in FY2024 and FY2025, with average room rates climbing to ₹7,800-8,000 in FY2025.
Even though some outliers exceed pre-Covid numbers, the industry is expected to reach the peak levels of 2008 by FY2025. The medium-term outlook remains optimistic, bolstered by improvements in infrastructure, air connectivity, and the growth of large-scale MICE events with new convention centers recently opening, as stated in the report.
