Fortune favours the flexible: why investors are betting on Indian Hotels, EIH, Lemon Tree et al.

Synopsis
After being battered by prolonged lockdowns and other challenges, the hotel industry seems to be clawing back to profitability. Several key operating metrics are now ahead of the pre-pandemic levels. While the recovery has been sharper than expected, companies will have to stay as flexible as they were during the post-pandemic months to maintain the growth momentum.

Shares of hotel companies are on a gravity-defying rise. At a time when stock markets across the world are reeling from multiple headwinds including high inflation, tightening interest rates, and geopolitical tensions such as the Russia-Ukraine war, the hotel industry is beating all the odds. Sample this: Over the last six months, hotel stocks have gained 40% while the Nifty50 lost 3%. Indian Hotels, up 44%, is the top gainer in the pack