Hotel Stocks India Fall After PM Modi Remarks; IHCL Backed
Hotel stocks India fell up to 5% after PM Narendra Modi’s remarks on overseas travel, though analysts continue backing IHCL.
nishathapa 
New Delhi, May 12, 2026: Hotel sector stocks dropped by as much as 5% in intraday trading Tuesday after remarks by Prime Minister Narendra Modi urging citizens to cut non-essential foreign exchange outflows, including overseas travel. The sell-off came alongside a weak broader market, even as analysts held their ground on long-term domestic demand.
By 12:55 PM, several hospitality and travel stocks were in the red on the National Stock Exchange (NSE). Praveg led the fall, down 4.6% at ₹289.40. And others followed—Thomas Cook, Orient Hotels, ITC Hotels, Apeejay Surrendra Park Hotels, and Wonderla Holidays, all slipping over 3% during the session.
More names joined the slide. Taj GVK Hotels & Resorts, EIH Associated Hotels, Samhi Hotels, Indian Hotels Company Limited (IHCL), EIH, Chalet Hotels, Leela Palaces Hotels & Resorts, Lemon Tree Hotels, Mahindra Holidays, and Juniper Hotels dropped between 1% and 3%.
Market reaction follows policy remarks on foreign travel
The trigger was clear.
The Prime Minister, speaking in Secunderabad, asked citizens to avoid overseas travel, destination weddings, and foreign holidays for at least a year. The goal: conserve foreign exchange as global pressures build, from fuel costs to tensions in West Asia.
The numbers add context. India’s forex reserves fell by USD 7.794 billion to USD 690.693 billion for the week ended May 1, after an earlier drop of USD 4.82 billion.
Markets reacted instantly.
But not necessarily deeply.
Analysts see knee-jerk reaction, not structural concern
Experts aren’t reading this as a long-term signal.
They’re calling it what it looks like, a sentiment-driven dip.
Avinash Gorakshakar, Head of Research (Equity) at Globe Capital Market, said the remarks don’t hurt hospitality. If anything, they may push travel spending back into India.
And that’s the key shift.
Less outbound. More domestic.
That means hotels, resorts, and wedding venues here could see upside.
Domestic travel demand remains strong
On the ground, demand hasn’t cracked.
Hotels are still reporting strong forward bookings. RevPAR growth is holding. Both leisure and business travel remain steady.
Vikas Jain, Senior Vice President at Axis Securities, called the market move temporary. He pointed out that investor sentiment often reacts faster than actual business performance.
And right now, bookings say demand is intact.
IHCL emerges as preferred pick among analysts
Within the sector, IHCL stands out.
Analysts are backing it for its strong domestic positioning and wide brand spread.
The advice is simple: don’t exit in panic.
Because the bigger drivers, rising domestic travel, higher spending on experiences, and infrastructure growth, are still in play.
Shift toward domestic travel may support the sector
There’s a flip side to the Prime Minister’s appeal.
If travellers skip international trips, that money doesn’t disappear. It gets spent here.
Staycations. Destination weddings. Leisure travel within India.
That flow is already visible.
Hotels are holding rates. Occupancy is steady. Demand hasn’t slowed.
The market dipped.
But the business hasn’t.
