Luxury hotel stocks show fresh optimism despite broader sector weakness

Investor sentiment towards luxury hotel stocks showed a rare spark of optimism on the first trading day of the week, as listed hospitality companies reported strong revenue growth for the July-September quarter of FY26. 

This came even as the wider travel and leisure sector continued to post negative returns for a second consecutive week.

Fresh financial disclosures reveal that all major listed five-star hotels posted year-on-year revenue growth, driven by higher occupancy, improved room rates, and recovering corporate and event bookings.

InterContinental Dhaka, operated by state-owned Bangladesh Services Limited, saw its revenue jump by 73% to Tk39.45 crore. The Westin Dhaka, owned by Unique Hotel & Resorts PLC, recorded a significant rise by 54% to Tk47.26 crore, while Sheraton Dhaka nearly doubled its revenue to Tk21.53 crore. Sea Pearl Beach Resort in Cox's Bazar and The Peninsula Chittagong also posted strong revenue gains.

Despite this operational momentum, the picture for investors remains mixed.

Unique Hotel & Resorts – owner of The Westin and Sheraton – posted a substantial profit increase to Tk40.16 crore, buoyed by improved cost management, a rebound in hospitality activity following last year's disruptions, and a sizeable gain from its joint venture power project, which contributed Tk31.3 crore. The company also noted that earnings benefited from gains on quoted securities.

Peninsula Chittagong reported perhaps the most striking operational turnaround. The company highlighted a 60.7% surge in revenue and a shift from an operating loss to a profit of Tk1.50 crore, signalling more efficient pricing strategies and stronger core hotel performance.

However, not all industry players achieved profitability. Bangladesh Services Limited and Sea Pearl Beach Resort remained in the red, weighed down by elevated interest costs on substantial loans – an issue increasingly worrying investors as rising interest rates tighten financial pressure on highly leveraged firms, said an analyst of a brokerage firm. 

Bangladesh Services posted a loss of Tk24.28 crore, while Sea Pearl's loss narrowed but remained sizeable at Tk10.14 crore.

Dividend announcements for FY25 also underscored the uneven financial landscape. Unique Hotel declared a healthy 16% cash dividend, while Peninsula recommended just 0.5% and Sea Pearl offered 1% for general shareholders. Bangladesh Services, in contrast, opted not to pay any dividend for the year.

Even with improving fundamentals, investor sentiment across the travel sector has been subdued. According to EBL Securities' weekly market review, the sector registered negative returns for two consecutive weeks – an indication that investors remain cautious amid overall market volatility.

Still, hotel stocks saw renewed activity today (16 November). Unique Hotel rose by 4.05% to Tk38.50, Sea Pearl climbed by 3.92% to Tk31.80, and Peninsula gained by 0.66% to Tk15.30. Bangladesh Services, with only 0.32% of shares available to the public, remained stuck at Tk5.20 – below face value – due to its extremely low free float.