EIH Ltd, which runs hotels under Oberoi and Trident brands, feels, more of its hotels can witness occupancy rates of around 90 per cent and there is an opportunity to improve average room rate (ARR) going ahead.
There is opportunity to “drive” ARR both in cities and in luxury locations in the country, Vikramjit Singh Oberoi, Managing Director and Chief Executive Officer, said during an investor meet of EIH.
“I still remain optimistic. Hotels can run well into the 90 per cent occupancy. In Bengaluru for example, our hotel is doing that. So, there is an upside in terms of occupancy. And, there is an upside in terms of rate. Our focus always is rate in charging or having a premium ARR for the services we offer and the products we have,” Oberoi said while replying to a set of questions on possibilities of increasing occupancy rates for the company.
Hospitality industry
The hospitality major, has reported over two-fold year-on-year jump in its consolidated net profit to ₹247.59 crore for the fourth quarter last fiscal, buoyed by a higher revenue. Revenue from operations during the period rose 16.37 per cent y-o-y at ₹741.34 crore.
The company witnessed its domestic occupancy rate growing to 81 per cent in Q4FY24 compared with 80 per cent in Q4FY23. ARR rose to ₹19,713 (₹17,963 crore).
“I believe with the supply-demand imbalance which is gong to increase for the over next few years, there will be a significant opportunity to drive ARR up,” Oberoi said, adding demand is going to go up in luxury segment by about 8-10 per cent in the next 10 years, while supply will be growing quite a lot slower than that for the hospitality industry in the country.
Future targets
EIH Ltd said it will “work towards” adding 50 new hotels by 2030. Two hotels will be opened in India this fiscal.
It will also launch two overseas hotels in this financial year.
The hospitality major EIH Ltd currently has around 30 hotels globally.