Yo Splash Resort Hotel was prepared to receive the residents of Nir Yitzhak/Maariv
The tourism sector is always the first to be affected during the war, yet the shares of the hotel sector jump by tens of percent even compared to their situation before the outbreak of the war with the terrorist organization Hamas in Gaza and the fierce fighting against the terrorist organization Hezbollah in the north.
The shares of the three prominent hotel chains traded on the Tel Aviv Stock Exchange and which were reviewed by Walla!
Silver for the same period rose by about 19.5% on average from the last trading day before the outbreak of the Gaza war until the last trading day this week (Thursday), and by about 28.4% since October 7th.
This is compared to an increase of about 6.9% in the Tel Aviv 125 index since the end of the trading day on October 5th last and about 14.6% since October 7th. The
big leaper is the Fatal share, which has increased by about 31.2% since October 5th and approx. -43.4% since October 7. It is followed by the Isrotel share with an increase of about 26.3% and about 35.3% for the same periods, and only the share of the Dan hotel chain lags behind with an increase of about 1% and about 6.7% respectively for the same periods The question that arises is if there are
no
tourists, and the hotel companies themselves warn of damage to their business results, how do their shares soar?
Hotel chain results/image processing, Walla system!
Sources in the capital market explain that it is precisely the lemons of the war that make it possible for investors to price the future lemonade.
This is because the local hotels' competition for the Israeli tourist is against foreign hotels, which at this time do not get to benefit from the money of the Israelis in the shadow of the events of the MLA warnings, the waves of anti-Semitism and the many demonstrations around the world against Israel.
Also the fact that many airlines have stopped service to Israel and the result is a sharp price increase in the field, led to this situation.
And while the competition is blocked due to the events, and the demand for a vacation is only increasing, the capital market predicts that this demand will explode towards the local hotels, as has already been observed in the past after military operations and various global crises, including the Corona epidemic.
In addition, in contrast to past events, in which the Israeli hotels suffered a lack of income during the periods in question, in the current period they enjoy and will enjoy a basket of compensation from the tax authority, alongside income from the taxpayers' money from hosting refugees from the south and the north - even if not at the rates they are used to.
So the market is pricing forward towards the Israeli 'attack' on the local resorts, which is likely to increase the prices as well, which are eventually also paid by the Israelis - until the return of most of the airlines to serve Israel for our vacations abroad.
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Benefit from the tax authority's compensation alongside the taxpayer's money from the accommodation of refugees from the south and the north/ShutterStock
Additional support received by the leapfrogging companies, especially Fatal, is in the form of the downward trend in interest rates, and this is due to the fact that the company is leveraged, and therefore will be able to reduce its financing costs and thereby improve its business results.
Dan, on the other hand, does not receive the same increases, and sources in the capital market attribute this to the lack of trading in its stock at the same rate as its competitors in the table, since most of them are held by interested parties.
The deepening of the northern front, however, may have a negative effect on the hotel companies, like the other companies in the economy, thus it is possible that the direction of their shares will also change accordingly.
Until the northern front is decided, the foreign airlines will return to landing in Israel, the Israelis will continue to yearn for a vacation landing, which October 7th, it seems, only increased the need for it, and the hotel companies will continue to need the support of investors.
More on the same topic:
Hotels
The Stock Exchange in Tel Aviv
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Fatal
Dan
Yisrotel
War of Iron Swords
Gaza war
Holiday
tourism