Lemon Tree Hotels Q4 Review - Notable Recovery: Dolat Capital
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Dolat Capital Report
Lemon Tree Hotels Ltd. Q4 FY21 witnessed a healthy occupancy recovery from 46.5% to 59.3% QoQ on operational inventory.
Average room rate was flat QoQ.
Occupancy recoveries in H2 FY21 pin hopes of revival in hotel industry to be sooner than expected, a key positive.
Cost rationalisation benefits are likely to be structural. Low-inventory supply and consolidation are likely to be other benefits.
But, the average room rate recovery is likely only by FY24; especially in backdrop of second wave of Covid-19.
The company with its superior positioning in ~Rs 4,000-4,500 average room rate bracket in mid-market segment, high-dependency on domestic clients (~85-90%) and room revenues (~75%) is well-poised for recovery.
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