Asian Hotels sees improved occupancies, ARR Nov onwards

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Asian Hotels sees improved occupancies, ARR Nov onwards

In an interview with CNBC-TV18, Sushil Gupta, Managing Director of Asian Hotels spoke about the results and his outlook for the company.

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Asian Hotels announced its numbers for the July-September quarter of 2009. The company's net profit declined to Rs 0.94 crore versus Rs 17.3 crore year-on-year (YoY) basis. Its net sales slipped to Rs 89 crore versus Rs 112 crore.
In an interview with CNBC-TV18, Sushil Gupta, Managing Director of Asian Hotels spoke about the results and his outlook for the company.

Below is a verbatim transcript of the interview. Also watch the video.
 
Q: Can you take us through what led to the slip in sales and profits? Is it lower occupancies or lower rates compared to last year?

A: It's the combination of both - lower occupancy as well as lower rates. In the last six-months - from April to September 2009 - has been one of the worst periods I have seen in the hotel industry.

Q: What do you foresee happening then with room rates for the second half of this financial year? Have they recovered and by how much?

A: They have started recovering from mid-October onwards and especially November was very good. Things have started picking up. I am happy about the fact that the occupancies have started picking up. If I compared November 2008 with November 2009 - it is showing a very healthy improvement on that. First occupancies have to pick up then room rates will pick up slowly.

Q: Do you expect this holiday season to be a good one? Are there any early sings indicating that it's a good holiday season or much more sluggish compared to last one?

A: I cannot say much about the holiday season because all our hotels are in the metros. They are all business destinations. I hear there is good demand for leisure also but not at high-end tourism. High-end will still take some more time to pick up.

Q: So you are saying corporate demand has not picked up substantially yet?

A: It has. As I told you the November the occupancies have been much better than in November 2008.

Q: Specifically what are occupancy rate at right now for you?

A: Delhi and Mumbai are doing around 85% and so is Kolkata. All over, the country is witnessing good occupancies and those are better than last year. Of course I am not talking November 26 onwards - after 26/11 - but before even, if you compare your numbers, they are much better. That is a very healthy indicator.

Q: The board had agreed on restructuring of the company earlier this month. How soon does that go through and can you walk us through the restructuring process?

A: I cannot talk much about that since the matter is under sub-judice. But we had some changes on the appointed date and for that there is extraordinary general meeting (EGM) on December 11. Once the shareholders approve it the whole process will be over in the next 45 days

Q: In the next 2-4 quarters any new room additions are happening for Asian Hotels in any of the capacities?

A: Not really. But once the company demerges into three entities - all the promoter groups have their plans to expand. They have land banks etc and once this process is over by maybe end of January, then they will all be in growth mode, which means good for all the three companies. There will be growth.