Indian Hotels sees occupancy rising; expects to reduce debt over 3-6 months
Indian Hotels is witnessing an improvement in occupancy levels from July onwards after the lockdowns lifted. CNBC-TV18 spoke to Puneet Chhatwal, MD & CEO of Indian Hotels. According to him, almost 40 of the hotels did well in July as compared to pre-Covid levels. The company plans to reduce its debt over the next 3-6 months.
Indian Hotels is in focus on the back of its Q1 earnings. The company reported a narrowing of its consolidated net loss to Rs 301.58 crore for the quarter ended June 30, 2021. The company had posted a net loss of Rs 312.60 crore for the corresponding period of the previous fiscal. Its consolidated total income stood at Rs 370.30 crore for the quarter under consideration versus Rs 175.34 crore for the same quarter in the year-ago period. There has been an understandable weakness sequentially and the year-on-year growth comes on a low base as well. To understand the current occupancy picture and outlook, CNBC-TV18 spoke to Puneet Chhatwal, MD & CEO of Indian Hotels.
On occupancy, Chhatwal said, “The first quarter of course was a significant improvement over the first quarter of last year but coming from a low base, that is not very helpful. However, July has shown significant improvement and we see the same trend in the first nine days of August and August is trending a bit higher than July.”
“International travel is shut. If that forms a certain percentage of your revenue, that automatically comes to zero. Then there are restrictions in certain cities, states in terms of travel, let us say Mumbai after 4 PM dining is not possible in restaurants, so that certain percentage also comes to a halt,” he further mentioned.
He added, “July went almost at 70 percent of pre-COVID levels for the portfolio and when it comes to certain domestic leisure destinations, almost 40 of our hotels did better in July than in July Pre-COVID. So that gives some hope although we are still missing almost 30-40 percent of the potential revenue because of lockdowns or restrictions or other issues concerning the pandemic.”
On debt, Chhatwal said, “Debt has increased because of cash burn due to the second wave in the months of April, May and June. We plan to definitely bring down debt over the next three to six months and we are well positioned for any kind of inorganic growth opportunities that might come by.”
On pricing, he said, “The pricing increased in the first quarter, in this quarter we saw a 45 percent increase to the same quarter last year at an average rate of Rs 7,000. We expect this to keep moving upwards over the next few quarters. To reach pre-COVID levels, I think it is very difficult to make a guess. There are two cases which are possible. One, without a third wave or with the third wave or maybe not such a big impact as the second wave had caused. I think in order to get there on pricing it may take anywhere between 3-4 quarters, going forward.”
On opening of new hotels, he said, “We are a high growth company having the highest number of hotels in our pipeline. We expect to open a hotel in a month so one of the reasons why we would be showing higher recovery in revenue versus pre-COVID is not because growth will keep compensating on the revenue front.”
On food and beverage, he said, “Food and beverage is very important for us, almost 40-45 percent of our total revenue came from food and beverage and July had certain wedding dates that helped accelerate the revenue recovery.”
For full management commentary, watch the video.
(With inputs from PTI)
(Edited by : Dipika)
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