InvestorQ : Why have the shares of Lemon Tree Hotels seen such a sharp rally in the last few weeks?
Rashi Mehra made post

Why have the shares of Lemon Tree Hotels seen such a sharp rally in the last few weeks?

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Archita Jajjoo answered.
3 weeks ago
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Shares of Lemon Tree Hotels hit a 3-year high at Rs82.65 on the back of heavy volumes. Lemon Tree Hotels operate in the upscale segment and in the mid-market sector of the hotel and hospitality segment. The stock is up nearly 106% in the last one year. Last month, Lemon Tree Hotels had announced plan for Lemon Tree Hotel, Hubli in Karnataka. With increasing momentum of vaccination drive, travel demand improving coupled with sharp fall in Covid-19 cases, the contact intensive sectors are really looking up.

Lemon Tree Hotels saw peaking of average daily rate (ADR) and occupancy in FY19, FY20 but dipped sharply later due to the pandemic. FY22 has already seen a quick recovery in average room rate (ARR) and occupancy. The occupancy and ARR are expected to return to pre-Covid levels by December 2022 and early 2023. An occupancy of 70% plus is considered to be comfortable for the company and that would be possible by the middle of 2023. The increasing traction in corporate travel should also benefit Lemon Tree substantially.

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