Shares of several prominent Indian hotel and tourism companies experienced a notable downturn on Monday, following an appeal from Prime Minister Narendra Modi for citizens to curb unnecessary foreign travel, overseas vacations, and destination weddings.
Among the hardest hit were Indian Hotels, Easy Trip Planners, Thomas Cook (India), Lemon Tree Hotels, and IRCTC, with their stock prices falling by up to 4% in early trading. The Prime Minister's statement comes amidst rising global oil prices and disrupted energy supply chains, primarily due to escalating tensions between the US and Iran in West Asia, which are impacting India's economic parameters.
Market Impact on Key Players
- Indian Hotels: The Tata Group-owned hotel chain saw its shares fall over 2% to Rs 656.25, down from a previous close of Rs 673.30. Its market capitalization decreased to Rs 93,946 crore.
- Easy Trip Planners: This domestic and foreign tour operator experienced a 3% drop, with shares trading at Rs 7.66 compared to its previous close of Rs 7.96. The firm's market cap slipped to Rs 2811 crore.
- Thomas Cook (India): As a leading omnichannel travel and financial services provider, Thomas Cook (India) was among the top losers, with its stock falling 5% to Rs 96.79. Its market cap stood at Rs 4360 crore.
- Lemon Tree Hotels: Operating a chain of domestic and international properties, Lemon Tree Hotels' shares declined by 3% to Rs 117.50 from Rs 120.45, reducing its market cap to Rs 9336 crore.
- IRCTC: The government-owned tourism operator's stock also slipped 2% to Rs 552.05, down from Rs 565.10, bringing its market cap to Rs 44,560 crore.
PM Modi's Call for Economic Prudence
On May 10, Prime Minister Modi urged Indians to adopt practices that became common during the COVID-19 pandemic, such as working from home, conducting online meetings, and reducing overall travel and consumption. He emphasized that restarting these systems would be in the national interest, particularly to conserve foreign exchange.
“During the Corona period, we developed many systems of work from home, online meetings and video conferences. Today, the demands of the times are such that if we restart these systems, it will be in the national interest,” PM Modi stated.
This strategic call aims to mitigate the economic pressures stemming from global geopolitical events, which are straining India's energy imports and balance of payments. Investors reacted swiftly, anticipating a potential reduction in outbound tourism and its associated revenue for these companies.