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Hospitality Stocks Rebound: India-Pakistan Ceasefire Sparks Relief Rally in Hotel Sector

Updated: May 12, 2025 09:59

Image Source: Upstox
Indian hotel stocks staged a sharp rebound on Monday, buoyed by the weekend ceasefire agreement between India and Pakistan after days of escalating border tensions. The truce, which followed intense exchanges of missiles and drones, has lifted investor sentiment across the hospitality sector, reversing last week’s steep losses and fueling hopes of a swift business recovery.
 
Key Highlights:
  • Stocks Bounce Back: Shares of major hotel chains, including Indian Hotels Company (Taj), EIH Ltd, Lemon Tree Hotels, and Chalet Hotels, saw notable gains in early trade. This comes after the sector suffered declines of up to 7% last week amid conflict-driven travel advisories and widespread booking cancellations.
  • Sentiment Shift: The ceasefire has removed a major overhang on investor confidence. Analysts say the de-escalation marks a strategic diplomatic victory for India and is expected to drive a positive market opening and renewed interest in travel and hospitality stocks.
  • Business Impact: During the conflict, hotel chains reported over 50% booking cancellations and anticipated a 40% slump in business for May due to travel restrictions and safety concerns. With peace restored, industry executives expect a gradual return of domestic and international bookings, especially in key metros.
  • Market Outlook: Experts caution that while the ceasefire has sparked a relief rally, volatility may persist as the situation remains fluid and companies work to rebuild occupancy and revenue pipelines. Technical analysts highlight that broader market recovery hinges on sustained peace and positive earnings momentum.
  • Historical Precedent: Markets have historically rebounded following major geopolitical de-escalations, and the hospitality sector stands to benefit most from renewed traveler confidence and easing restrictions.
Sources: Economic Times, Financial Express, Reuters, Angel One

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