What if you invested Rs 1 Lakh in these hotel stocks during COVID-19?

The COVID-19 Pandemic impacted the world’s economy across various industries and every industry plays an important role in the contribution of GDP of the country. During the pandemic, many nations implemented lockdown measures to control the spread of the virus. The lockdown involved restrictions on movement which leads to supply chain disruption, closure of business, and suspension of economic activities for a certain period of time. Almost every industry got impacted during the pandemic including the hotel industry. The pandemic resulted in travel restrictions, lockdown, and a decline in tourism, which has had a severe effect on hotels across the country.

The hotel industry plays a significant role in any economy. The travel restrictions and reduced demand caused a sharp decline in occupancy rates, leading to temporary closures of many hotels. Layoffs and job losses were widespread as hotels operated at minimal capacity. Stringent safety protocols and hygiene measures were implemented to protect travellers from COVID-19. The hotel industry showed some signs of recovery following the announcement and implementation of the COVID-19 vaccination drive. The government gradually lifted the restriction when the vaccination drive was in pace and the hotel industry began to witness a gradual revival. People started travelling and exploring the world which results in increased travel demands for both domestic and internal and hence recovery in the hotel industry.

In this article, we are going to observe what if someone had invested Rs 1 lakh during the pandemic fall in any of the hotel stocks mentioned. The returns are calculated based on the closing price of the stock as on March 24, 2020. The reason behind considering this date is, this is the day when Nifty50 created its bottom of 7511 levels and started to rebound from that level. Currently, Nifty50 is trading around 18800 levels and today it closed at 18856.85. If we calculate the Nifty50 returns from that day, it is close to around 151%.

Everyone wants to buy products at heavy discounts, In India there are multiple offers run by online shopping companies on their products. Almost every customer waits for these discounts patiently to buy their favourite gadgets and products. Then why investors are not applying the same method to buy good and reputed companies which are having great growth potential and the capability to generate multibagger returns? If someone has invested Rs 1 lakh into the stocks of Kamat Hotels, then the investment value would become Rs 13.6 lakh today.

Warren Buffet, a well-known and highly successful investor said in one of his famous quotes “Be Greedy when others are fearful, and be fearful when others are greedy”. This is a very simple but effective investment approach. The philosophy is rooted in the idea of taking advantage of market inefficiencies and investing with a long-term perspective. 

When others are fearful and selling their investments, prices may become undervalued, presenting opportunities for those who are willing to buy when everyone else is selling. By being greedy, or rather, being willing to take calculated risks and invest during uncertain times, one can potentially benefit from the eventual recovery and reap significant returns.