The GST Council reduced rates on hotel room tariffs between ₹1,000 and ₹7,500 per night to 12% (from 18%) and those above ₹7,500 to 18% (from 28%).
Whilst it is difficult to gauge the exact demand improvement post GST cut, the leisure segment is likely to be the biggest beneficiary as its demand is more price elastic, with higher impact on the upscale segment (higher GST cuts).
2QFY20 could be tepid for the hotel sector given economic weakness, improvement in business travel post tax cuts can put the occupancy/pricing improvement story back on track. One could look at Chalet Hotels, Lemon Tree Hotels and Indian Hotels
Disclaimer: The above report is compiled from information available on public platforms. inChat team advises users to check with certified experts before taking any investment decisions.
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