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basant
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   Posted: 10/Nov/2006 at 3:20pm |
If real estate prices drop then it would be viable for new hotel companies to put up hotels by buying land/buildings in the heart of the city. No one would like to over pay for land and then bet on higher room rent for viability of the projects. So the real competitive advantage of location will be higher land prices which will not encourage a lot of new companies to put up hotels and that in case would lead to shortages - something like a self fulfilling prophecy.
By the way Pantaloon's "Ksh*tij fund' would have constructing hotels in the malls that they put up. Some more supplies will come in I was told Bombay Dyeing is looking at putting up a hotel at its mill land but nothing to really upset the apple cart - land prices being high acts a s a prohibitive factor.
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vivekkumar_in
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Joined: 19/Sep/2006
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Posted: 10/Nov/2006 at 9:43pm |
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Basantji,
I don't quite agree with the view that if Real
Estate prices go down , Hotel room rates will go down. They are not
Directly related.
Have you noticed if some one has rented a house, how house rents keep
increasing every 2 yr by say 15% immaterial of where real estate market
..
I think the same should be applicable for Hotels too.. Room rents can increase with :
- pace with inflation
- pace higher than inflation in areas of tourism
- pace much higher than that in places of high influx of floating population
None of these are directly corelated to real estate prices through..
Real estate price would only have a indirect effect in the sense that,
in a real estate price drop, it makes attractive for another competetor
to purchase and build a hotel.
What do you say ?
Cheers,
Vivek
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Often we forget there's a company behind every stock,and there's only one reason why stocks go up. Companies go from doing poorly to doing well or small companies grow to large companies.
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basant
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Posted: 10/Nov/2006 at 9:50pm |
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There is not a direct correlation to prices going down with real estate but with drop in real estate new hotels could come up easier and stop the further rise in room rents. the average room rent is about 10k in large posh hotels and is expectred to go up. That is why these stocks trade at high PE's. In case real estate prices crash then obviously it would indicate slackening overall economic demand which in any case will cap the upside to room rents to a more acceptable inflation adjusted. Room rents would not fall 30%!!!
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kulman
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Joined: 02/Sep/2006
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Posted: 10/Nov/2006 at 10:38pm |
As per my experience, I have seen prices dropping from around Rs. 8,000 in mid-90s to Rs. 4,000 during 2001-02 in Mumbai for 5-star rooms. My guess is that it is a matter of supply-demand, economic activity affecting business/tourist travels etc..
Edited by kulman - 10/Nov/2006 at 10:40pm
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tigershark
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Joined: 13/Oct/2006
Location: India
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Posted: 10/Nov/2006 at 8:01am |
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hotel arrs are just like any other business aquestion of supply and
demand more inmates and limited number of rooms higher the arr and vice
versa, in the peak of monsoon here in goa yu get 5 star rooms at 40%
off the peak rate why bcos notmany visit in july,so as long as more and
more poeple move around and supply remains tightand smart hotelires
resort to innovative selling ideas hotels should do well.
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understanding both the power of compound return and the difficulty getting it is the heart and soul of understanding a lot of things
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vivekkumar_in
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Posted: 23/Jan/2007 at 5:02am |
Indian Hotels Q3 Profits up by 42 % and sales up by 29% 
Also news that the company may look to double the inventory in the country
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Often we forget there's a company behind every stock,and there's only one reason why stocks go up. Companies go from doing poorly to doing well or small companies grow to large companies.
P Lynch
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basant
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Posted: 23/Jan/2007 at 8:13am |
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Stock has been quiet for a while now Smart investors like buying companies that have not yet started their move.In the recent frenzy this stock seems to have been forgotten by the markets.
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'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in
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tigershark
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Posted: 24/Jan/2007 at 7:21pm |
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shershah suri has reco the stock as a new yr gift
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understanding both the power of compound return and the difficulty getting it is the heart and soul of understanding a lot of things
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