For luxury hotel chains, a few such indicators have led investors to believe that the sector, which has been in the dumps for long, is poised for a turnaround in profitability. Graphic: Naveen Kumar Saini/MintIn capital-intensive sectors with long payback periods, investors often follow lead indicators that determine growth in times to come. For luxury hotel chains, a few such indicators have led investors to believe that the sector, which has been in the dumps for long, is poised for a turnaround in profitability. Data also shows that demand growth has been outpacing supply in luxury hotels since fiscal year 2014 (FY14) and the margin is getting wider. That said, the bane of the hotel sector is the high debt and resulting interest costs that cause significant cash burn during dull times.

Source: Mint March 20, 2018 02:03 UTC