Hotel industry sees healthy rise

News Posted - 2010-02-05

The December quarter results have reinforced the positive sentiment which has been building up for the hotel industry. The industry has rebounded on the back of a healthy rise in occupancy levels as well as revenue per available rooms.

The results of all the leading players in the industry Indian Hotels Company, EIH, Asian Hotels, and Hotel Leela Ventures reflect the change in fortunes with industrial growth back on track.

For the December quarter, all the big players saw a rise of over 50% in their sales while their net profit vaulted by over 100% compared to the year-ago period. A comparison on a year-on-year basis would not be appropriate, given the jolt that the travel industry received in the wake of the global financial meltdown and the terror strikes in Mumbai.

Comparing the December 2009 quarter numbers with the September 2009 quarter would present a clearer view of the extent of business recovery in the industry. The segment leader, Indian Hotels Company, for instance, reported net sales and net profit of Rs 422 crore and Rs 64 crore, respectively, during the December 2009 quarter.

This represents around 48% and 400% jump on sequential basis, respectively. Much of this optimism is also reflected in the rising hotel occupancy figures in the top four cities. In the Mumbai region, for instance, the occupancy levels for Indian Hotels properties shot up to 71% during the third quarter from 55% in the second quarter and 51% in the first quarter.

The company revenue per available room RevPAR for the Mumbai region jumped to Rs 6,503 in December 2009 quarter from Rs 4,810 in the previous quarter. The industry is on course for a bigger and better quarter as occupancy levels and ReVPAR continues to rise in major centres.

In fact, the upcoming Commonwealth Games 2010 in Delhi in October this year would also ensure that the earnings of the industry are boosted further next fiscal. It is not just industry biggies who are set to gain from the Commonwealth Games, mid- and small-sized players would also benefit, thanks to the overall rise in business in the industry.

Source: Indian Realty News