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Airlines, Hotels Benefit from Surge in Profits Amid Maha Kumbh

Jan 29 || TC - The Maha Kumbh Mela has provided a significant boost to the hospitality and airline industries, with profits expected to rise due to soaring demand. This is reflected in the surge in the share prices of companies like Benares Hotels, a subsidiary of the Tata Group’s Indian Hotels.

On Wednesday morning, the share price of Benares Hotels Ltd. rose to Rs 10,610.00 on the BSE, marking an 11.50 percent increase from the previous closing price of Rs 9,552.95 on Tuesday.

The stock of this smallcap hotel company has been climbing, even as the BSE Sensex and the smallcap segment have experienced declines.

Benares Hotels Ltd. operates properties such as Taj Ganges and Taj Nadesar Palace in Varanasi, as well as Ginger in Gondia, Maharashtra. The Indian Hotels Company Limited (IHCL) is the ultimate holding company of Benares Hotels.

For the third quarter (October-December), Benares Hotels reported a 20 percent year-on-year increase in net profit, reaching Rs 13.6 crore. The company’s revenue also rose by 16.2 percent to Rs 40.1 crore during the quarter.

The company attributed the rise in demand to the Kumbh Mela and related travel in the region, expecting further revenue growth as a result.

Airlines have also seen significant gains from the increased demand, with ticket prices surging during the Maha Kumbh period.

Airfares to Prayagraj from major cities have jumped significantly. For example, flights from Delhi to Prayagraj have gone up to ₹20,000 or more, compared to the usual ₹5,000. Similarly, flights from Mumbai to Prayagraj are priced between ₹20,000 to ₹56,000.

A non-stop flight from Delhi to Prayagraj with Akasa Airlines costs ₹24,262, while Air India charges ₹28,739 for the same route. Flights with layovers are even more expensive.

Similarly, SpiceJet's direct flight from Mumbai to Prayagraj starts at ₹20,482.

Direct flights from Hyderabad to Prayagraj have been fully booked until the last week of February, forcing passengers to opt for connecting flights. The quickest option, with a one-hour layover in Mumbai, takes five hours and is priced at ₹28,901 for January 29. The same flight on January 30 is priced at ₹36,901.

In addition, a report by ICRA has projected that the Indian hotel industry is set to grow by 7-9 percent in revenue during FY2025, driven by strong domestic leisure travel and events such as weddings and business travel.

ICRA expects hotel occupancy to reach decadal highs, with tier-II cities and spiritual tourism contributing significantly.

While domestic tourism remains a major driver, the arrival of foreign tourists has yet to fully recover since the pandemic, which will depend on global economic conditions.

ICRA anticipates that premium hotel occupancy will peak at 70-72 percent in FY2024 and FY2025, with average room rates expected to rise to Rs 7,800-8,000 in FY2025.

While some outliers are already exceeding pre-Covid levels, the industry is expected to reach the 2008 peak by FY2025. The medium-term outlook is optimistic, bolstered by improvements in infrastructure, air connectivity, and the growth of large-scale MICE events, especially with the opening of new convention centers in recent years, according to the report.

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