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Analyst Meet / AGM - Analyst Meet

Management expects the ARR and the Occupancy levels to improve in next 2-3 quarters

Indian Hotels

18-Jan-2016, 06:14
The company held its analyst meet on 18^th Jan'16 and was addressed by Mr. Anil Goel Executive Director and CFO

Key Highlights

Indian Tourism industry supply grew by around 4.1% in April to Dec 2015 period where as demand grew by around 10.6% YoY basis. There was an increase in most of the Tier 1 cities in the range of around 3-6% on YoY basis. Demand was strong across India; it was particularly strong in Banglore, New Delhi, Chennai, Pune, Jaipur and Hyderabad.

However with the increase in supply, the rates were also seen under pressure in cities like Banglore, Delhi, Chennai, Kolkotta and Ahmadabad.

Foreign Tourist Arrivals (FTA) in India has shown a consistent growth in every quarter for entire 2015 calendar year. On an average it has grown by around 6% YoY for 12 months ended Dec'15.

However, since the industry demand was stagnant for past years and supply continued to remain, there is still a supply demand gap which is impacting the overall occupancy and ARR of the hotel industry.

Average Occupancy rates, in India for calendar year 2015 stood at around 59% which was at 56% in 2014 and around 50% in 2013. While the average industry occupancy and the ARR is improving, as per the management, it will still take time say about 2 or 3 quarters, before the industry see higher ARRs. As per the management, despite the increase in occupancy, ARR actually have been more or less flat and in some case even lower on YoY basis.

As on Dec'15, Indian group of hotels has 136 hotels with inventory of around 16459 rooms. A total of 7 hotels including 1 in Dubai were opened in FY'15-16 so far, with another 2 coming up by the year end Mar'16. Management has planned another 12 hotels with around 1296 available room's capacity in FY'17.

The company has undertaken lot of marketing initiatives as well to increase the occupancy levels. For the first time, gifting option is available on Taj websites. Also to cater to the discounts offered by many websites, management has taken and used digital platform in a big way.

There were certain write offs of in fructuous projects and losses on sale on long term investments that weighted on the PAT growth of the company in Dec'15 quarter. As per the management these losses were to the tune of around Rs 15 crore.