Indian Hotels targets 40% revenve from overseas mkts

Nachiket Kelkar
Moneycontrol.com

Luxury hotels operator Indian Hotels wants to reduce its dependence on the Indian market and expand its footprint overseas to generate at least 40 percent revenue from outside the country in the future.
"At some point we had over 80 percent of profit and revenue coming from 1 market. In a global world today, we need to balance our portfolio...So the idea is to have at least 40 percent of revenue coming from outside of India, so we can balance our portfolio in the long term and not have all eggs in one basket," Raymond Bickson, MD said.
Currently two-thirds of its earnings come from India. Also read: Orient Express posts Q3 profit; to reply to Tatas soon
In order to increase its income overseas, it has acquired several properties in countries like the US and recently once again bid to acquire Orient Express Hotels, a operator of luxury hotels and trains.
The bid coming at a time the overall hotel industry has been in a downturn did raise eyebrows on the street and Orient Express has not yet responded to the latest offer. It has in the past rejected earlier offerings from the Tatas owned company.
Indian Hotels' executives categorically refused to give an update on Orient Express on Tuesday, but CFO Anil Goel said that when there are opportunities then one needs to take the plunge to grow.
"These opportunities don't come knocking every day. Therefore you bite the bullet. So if you are committed to the product and the market, you take the call," he said. Q2 RESULTS
Indian Hotels, which operates the Taj Group of Hotels on Tuesday reported a net loss of Rs 6 crore in the second quarter, compared with a profit of Rs 8 crore a year ago.
Its net sales in July-Sep rose to Rs 379 crore from Rs 358 crore.
The company's earnings were impacted by an increase in expenses, even as the overall business remained under pressure due to slowdown in tourist arrivals.
Over April-Sep, tourist arrivals in India rose just 3 percent to 2.6 million, compared with near 10 percent growth in the same period a year ago.
Indian Hotels is expecting a pickup in occupancies in the second half, and plans to raise room rates by 5-8 percent.
"The performance in first half has been fairly subdued...As we see the next two quarters panning, we definitely see occupancies improving. We do believe we could definitely take up rates marginally," said, Deepa Harris, Senior VP - Sales and Marketing.
Indian Hotels currently has 115 hotels with 13,887 rooms.
It has added 5 hotels with 509 rooms so far this financial year and has 8 more hotels (995 rooms) scheduled to open by March.
In 2013-14, it plans to add 13 hotels (1,521 rooms). Most of the new hotels opening over next 1.5-2 years will either be management contracts or through subsidiaries like Taj GVK and Roots Corp and so the company has not earmarked significant capex for its growth.
It has a consolidated debt of around Rs 3,800 crore.
The stock closed at Rs 62.95, down 0.4% from the previous close on the BSE.
nachiket.kelkar@network18online.com