5 Hotel Stocks That Jumped Up to 5% on August 20 — Key Reasons Behind the Rally

Hotel stocks in India witnessed strong momentum on Wednesday, August 20, 2025, even as benchmark indices traded with muted action. Shares of leading hospitality companies such as Lemon Tree Hotels, ITC Hotels, Chalet Hotels, EIH Ltd, and Indian Hotels Company gained between 2.7 per cent and 5 per cent during early trade. The surge was largely attributed to optimism surrounding potential Goods and Services Tax (GST) reforms for the sector.

Why Hotel Stocks Are Rising

According to reports, the central trigger for the rally was a proposal to reduce GST on hotel tariffs from 18 per cent to 5 per cent. While the finance ministry has not yet issued an official response, market participants believe such a reform could boost occupancy rates and profitability for hotel chains.

Beyond tax relief expectations, the industry outlook remains positive. India’s hospitality and tourism sector is expanding on the back of rising domestic consumption, foreign tourist arrivals, and infrastructure-led demand. Tourism revenues are projected to cross USD 59 billion by 2028. In the Union Budget 2025-26, Rs 2,541 crore was allocated for tourism development, including plans to create 50 new destinations across states. Seasonal factors, including multiple long weekends in Q2FY26, are also expected to drive higher room bookings.

Performance of Top Hotel Stocks on August 20, 2025

• Lemon Tree Hotels: The stock was trading at Rs 156.25, up 5.01 per cent, with a market capitalisation of Rs 12,379 crore. It was trading close to its 52-week high, just 3.3 per cent below it. Subsidiary Fleur Hotels recently emerged as the successful bidder for land allotment at Nehru Place, New Delhi.
   
• ITC Hotels: Shares traded at Rs 243.95, higher by 4.39 per cent, valuing the company at Rs 50,804 crore. Since its listing, ITC Hotels has delivered 36 per cent returns to investors, reflecting strong listing gains and sustained demand.
   
• Chalet Hotels: The share price jumped 4.55 per cent to Rs 999.95, with a market cap of Rs 21,867 crore. The stock remained 7.7 per cent below its all-time high.
   
• EIH Ltd: Trading at Rs 398.65, up 3.49 per cent, with a market capitalisation of Rs 24,930 crore. The stock recently crossed above its major moving averages and has a 52-week high of Rs 441.75.
   
• Indian Hotels Company: Shares gained 2.72 per cent to Rs 796.25, with a market cap of Rs 1,13,341 crore. The stock remains 10 per cent below its peak of Rs 894.15, achieved in December 2024

The hotel sector’s near-term outlook appears supported by policy expectations, higher travel demand, and seasonal boosts. Investors are also tracking developments such as upcoming Quarterly Results, possible dividend announcements, and expansion plans that may influence stock performance in the Mid-Cap and Large-Cap hospitality space.

Disclaimer: The article is for informational purposes only and not investment advice.