GST Cut May Put Hotel Stocks Back in Play

The GST Council has decided to cut tax on hotel rooms priced up to ₹7,500 per night from 12% to 5%

- Dipti Sharma

Hospitality stocks have had a checkered 2025. Most hotel stocks have eroded investor wealth, lagging their 52-week highs, as weak demand and earnings disappointments clipped growth.

Shares of EIH, Westlife Food, Indian Hotels Co, Jubilant FoodWorks, Specialty Restaurants, ITDC, Juniper Hotels, and The Byke Hospitality have slipped 3-28% in 2025 so far.

Though Kamat Hotels, Taj GVK, Lemon Tree, Samhi Hotels, and Chalet Hotels have managed gains of 3-31% over the same period, all of these are lagging their 52-week highs by a steep 8-126%, showed Capitaline data.

The fact that hotel stocks are far from their 52-week highs reflects the current softness in demand, said Prashant Biyani, vice-president of Institutional Equity at Elara Capital.

Biyani said growth was hit across the board due to the Pahalgam attack and the Air India crash, which weighed on both average room rate (ARR) and occupancy. While flight cancellations hurt occupancy in July, he believes ARR has recovered slightly in August.

The GST Council has decided to cut tax on hotel rooms priced up to ₹7,500 per night from 12% to 5%. Rooms above ₹7,500 will continue to attract 18% GST, while those below ₹1,000 remain tax-free.