EIH Ltd

Good morning, ladies and gentlemen, and thank you for attending this virtual meeting. I'm pleased to welcome you on behalf of EIH Limited and SKP Securities to EIH Limited's Q1-FY26 Earnings Webinar. We have with us Mr. Vikram Oberoi - MD and CEO, and Mr. Vineet Kapur - CFO.

Friends, this virtual meeting has been recorded for compliance reasons, and during the discussion, there may be certain forward-looking statements. These must be viewed in conjunction with the risks that the company faces. We'll have the opening remarks from Mr. Oberoi, followed by a presentation, and then a Q&A session. Thank you, and over to you, Vikram.

Thank you so much. Good morning, ladies and gentlemen, and a warm welcome. We just had our Q1 results, and unfortunately, the hospitality industry, and we're no exception to that, was impacted by Operation Sindoor, the tension between India and Pakistan, and also the geopolitical developments, in particular, between the US, Iran, and Israel. But despite those ruffles, we had a strong EBITDA performance for Q1. It would have been better had it not been for that.

We have world-class hotels in our country. We & our competitors have the finest hotels in the world, and certainly our approach is to drive ARR to reflect the quality of our hotels and the quality of service we offer.

So with that, I'll pass it over to Vineet for a quick run through our presentation, and then we can open it up to questions and answers. Thank you very much.

Thank you, Vikram, and good morning, everybody. We'll start with the Indian hotel sector first. For the outlook perspective, we see a strong hotel demand coming through for the current year 2025, and the factors are already mentioned there on the growth drivers. A lot of factors driving that growth, but majorly coming a demographic shift of the Indian population with good increase in UHNI base, as well as forecast for inbound tourism to grow by 15% in the current year.

If we look at the Indian hotel market, especially for Q1-26, we got impacted, in the 1st Quarter because of Operation Sindoor and the geopolitical situations in the Middle East. In spite of that, we saw passenger traffic increase by 4.4% on a year-over-year basis. That reflected also with a good buoyancy in ARR.

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Coming to operational performance, EIH consistently has maintained leadership versus the competition.

We continue to lead in most of the areas, including occupancy. We have maintained overall 20% lead over the competition, over the years, though, that has been cyclical, basis the market demand and cycles.

On average, we have maintained 20% leadership over the competition on the RGI front. Looking at MPI, we are higher by roughly 6% and we compare that three years back in June 2022, we have seen increase in occupancy, on ARR, there has been some drop, but overall, a strong leadership on the RevPAR side.

Continuing on the RevPAR movement, it's the same cyclical trends, what we see every year. Important to note here would be the base. From INR 9,811 in Q1 last year, we are at INR 11,350 this year, which is a growth of 16% year over year, on RevPAR. And we continue to see this base increasing year over year.

Vineet, can I just add one thing. The RevPAR growth in Q1 of this year versus Q1 of last year, we see… as you know, foreign travel to India declines come April or middle of April onwards. And despite that, we have been able to take up our rates. And our endeavor will be, during the winter months, to drive that even further, supported by foreign travel into India.

Coming on the next slide, which is the RevPAR growth by industry and by hotels. Industry growth was up at 12% in Q1. Our owned and managed hotels grew @ 16% which was a little higher than the industry growth. Oberoi Hotels continues to lead the pack with a growth of 21% on a RevPAR basis over last year.

The next slide shows the occupancy and ARR trends for Q1. We started the year pretty strong in April at 77%. But we saw a dip happening in May, impacted by Operation Sindoor, as well as the geopolitical situation in the Middle East. That has picked up a little in June, and we hope to see that trend changing in the current quarter. Overall, in spite of occupancy being flat, we saw a healthy growth on ARR every month. On a net basis, if we look at the overall quarter, we were almost flat at 70%, on occupancy but a good increase in ARR which is at 18% growth.

If we look at the same data for EIH owned hotels, we saw a dip in occupancy, and the dip was more prominent in the month of May, especially impacting our hotels in the northern region of India. Overall, there was an occupancy dip from 77% to 73%. In spite of the occupancy drop, we were able to maintain ARR and were able to grow versus last year.

If we look at growth by city in our hotels, including managed hotels, we saw healthy trends, except what you see in Shimla and Chandigarh, which were basically impacted by Operation Sindoor, where the travel to the northern part of India was restricted. At the same time, we saw increase in RevPAR in Jaipur and Ranthambore. In Hyderabad we saw a high increase due to one-time event of hosting the Miss World event, which took place in Trident, Hyderabad.

On the international front, we saw healthy increase. This was due to good performance by our hotels in Mauritius, Egypt, as well as in Marrakesh. Egypt and Marrakesh, were better mainly due to lower occupancy last year on account of Israel and Palestinian conflict, On the room revenue tailwinds, more or less in the same lines, nothing dramatic for any particular segment. We saw an impact on corporate segment where we are seeing a little drop in base in Q1, versus our last two to three years average. But otherwise, all the segments are showing the same trend as last year.

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Coming to the Quarter 1 financials, we'll start with standalone performance. For Q1 FY26, we recorded highest revenue in Q1 in the last 6 to 7 years. Even in last four years, we had the highest revenue in Q1, and EBITDA. PAT was not in the same line, and that was because of one-time impact. We have taken 110 crores impact in our financials due to Mashobra and due to that, PAT was on the lower side at 36 crores for the quarter.

If we look at consolidated performance, on the revenue and EBITDA, we had the highest ever revenue and EBITDA for the quarter. PAT was lower due to Mashobra impact of 110 crores.

On the funds position, we continue to add to our funds. This gives us a very healthy liquidity to push our long-term growth plans to support in the coming years.

Coming on the financials in detail. At consolidated level, overall revenue grew by 9% while expenditure grew by 6% , which resulted in a higher drop-through at EBITDA. EBITDA% for the quarter was 32% versus 30% last year. On operational side, good performance, but at the same time, we got impacted by Mashobra, due to the court judgment which came in the month of June. It resulted in an impact of INR 110 Cr on PAT due to which PAT was down 62%.

At standalone performance, good growth of 15% and this is in spite of the fact that we didn’t have Oberoi Grand and Oberoi Airport Services in the last quarter. On the expenditure side, the growth is lower than the revenue growth, which has helped us to increase the EBITDA drop-through and a growth of 28% versus last year. On EBITDA percentage, we have gone from 30% to 34% as of Q1 FY26. On PAT, we were down versus last year due to exceptional item of Mashobra of 110 crores.

On the awards and accolades, there is the list of awards which Oberoi Hotels has won. We continue to lead in the luxury segment and also are getting good awards from different authorities. We got the Best Hotel Group award from Telegraph Travel Awards. We were ranked No. 2 among the Best Hotel Brands in the World by Travel + Leisure, USA. The list goes on and if I look at the next sheet, our restaurants also were awarded to be the best in their own categories.

On expansion plans, we continue to drive a very healthy pipeline on the hotels. We just recently signed four hotels which are going to be managed. List of new hotels pipeline is 25 with 2,033 keys spread out across domestic and international, mainly in domestic. Number of keys in the domestic front would be 1,750 keys out 2,033 in total. Out of the 25 properties, we will be owning 8 and managing 17.

Next slide is the business footprint across national and international for Oberoi as well as Trident. Total number of keys in India is roughly 3,700. At the same time, 408 keys in international locations.

I am through with my set of slides. Back to you, Navin.

Thanks Vineet. Thanks Vikram. Friends, we open the floor for the Q&A session now. Anyone wishing to ask a question, request you to please raise your hand.

We will take the first question from Abhishek. Abhishek, please unmute yourself and go ahead.

Yeah. Hi, good morning. I have two set of questions. One is regarding the RevPAR. So basically, what I have observed that the average RevPAR which is given across the industry and for EIH, should be including the F&B revenue as well, right? Otherwise, the math doesn't add up.

First of all, good morning Abhishek. The RevPAR is revenue per available room. It does not include F&B and other income.

Okay. So if we have to just do a math on the revenue for Q1 FY26 and if we try to take the RevPAR and multiply it with the number of available rooms into the occupancy ratio, say maybe an average, if it is 70% or 75%, it should add up to… it adds up to the entire revenue. That's my question. It shouldn't add up to the entire revenue, right?

Yeah. So I'm not sure what data you're seeing for others, but hospitality RevPAR very specifically, across our industry, refers to revenue per available room based on room revenue. It does not include food & beverage revenue and it doesn't include revenue from minor operating departments, and that's an industry-wide practice. But I'm not sure what data you're referring to for others. And if you want, we can certainly take this offline and better understand what data you're looking at to answer any further questions you have, if that's okay. But ours very clearly is revenue per available room, for room revenue only. That I can assure you.

Okay. And another question is on the case for which we have taken an exceptional hit of 110 crores.

What I understood earlier, is that we were to receive a substantial sum because we are surrendering the property back to them. But now in this particular quarter, we have taken a hit of 110 crores. So how do you see this going forward?

I don't want to make any statements on how I see this going forward. The 110 crore is based on the judgment of the court and accounting for that based on that. And if there may be questions, Vineet, can I just maybe hand it over to you to just give a summary of that 110 crore exceptional item for Wildflower for Mashobra INR 110 crores actually constitutes of various elements. We have passed the accounting entries basis the court judgment. The 110 crores net impact on account of equity value, which we are not receiving based on the court judgment and also has an impact of 50% advance against equity, which we'd given to Mashobra. So that constitutes the 110 crores.

So I have also seen that we have written back the used fee of that amount to 86 crores. So, that we expect that we are not going to pay and we are not going to receive any sum beyond this, right? That's the thing to… 86 crores was the user fee what is being mentioned. This was the amount we were carrying in our books as provision in view of using the property. Considering that stand was not taken by the court, we have

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reversed the user fee which was payable to the State Government. So, net of all these impacts is 110 crores.

Okay. So just another thing, now that the property is given back to the government, it’s very evident that there is going to be a hotel resort there, which is going to be managed by the hospitality players in India.

So do you expect that going to our competitors, or you would expect that there's a chance of us getting it back?

So we're managing the hotel currently, as you know, on behalf of the state government. And we will endeavor to… once the bidding process is announced and the criteria for bidders is disclosed, our endeavor will be to continue to operate the hotel on terms that are favorable and are a win-win for both the Mashobra Government or the Himachal Government and us. So that's our hope and our endeavor. Okay, thanks. Thank you, Abhishek. Thanks, Abhishek.

We'll take the next question from Amit Agarwal. Amit, please unmute yourself and go ahead. Amit, please go ahead. There's a disturbance in your line, Amit.

Yeah, Amit, your voice is coming out muffled. We can't unfortunately hear you clearly.

Amit, may I request you to disconnect and join again and we'll take your question. Thank you. So meanwhile, we'll take the next question from Raghav Malik. Raghav, please unmute yourself and go ahead. Raghav, you're on.

Good morning. Thanks for the opportunity. Congrats on a good set of numbers. So, the first question was just a follow-up on the RevPAR question. So in your PPT, you've detailed that domestic RevPAR is higher about 16% and international is 22% higher, but consolidated revenue is about 9% higher. So, what is the gap between this RevPAR and revenue growth number, essentially?

So, Raghav, the numbers what you're seeing on the RevPar is mainly of hotel. The things which impacted us on consolidated basis was, one was Mashobra, versus last year. Considering that we handed over the property on 31st March, we are no longer consolidating Mashobra in our numbers. So that is not there

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in our revenue year over year. At the same time, we also had an impact with Oberoi Grand, which is actually closed for renovation. We had Oberoi Grand operations last year, which we don't have now. On top of that, we also had Oberoi Airport Services in Mumbai, which was operational last year, but not in the current year. So due to these factors, one-to-one tie-up with RevPAR will not be possible with the revenue.

Okay, understood. And for international hotels specifically, the RevPAR… I mean, the slide details that it is including the hotels that were impacted by the recent Middle East conflict. So what is the like-for- like number then? On a non-like-for-like basis it is 22%. What is the number that would be, you know, ex the hotels that might have been impacted because of the conflict?

Raghav, actually, it's the other way around. What had happened last year was Marrakesh and Egypt, and to an extent Mauritius, were impacted by the Israel-Palestine conflict. Considering that has evened out, we have not seen the impact this year and has actually improved.

Yeah. And if I could just add to that, Raghav. In Egypt, we've also made some changes in how we are operating, which has resulted in a sharp growth in Egypt. So one is external factors. But I think due to internal changes that we've made in positioning the hotel, that has also helped see a strong growth in revenue, and therefore, RevPAR as well, both in occupancy and in… well, not in rates so much, but in occupancy. We've seen a sharp increase in occupancy as a result of that. And in Mauritius also, we've seen an increase as in Marrakesh. So I think all of that has contributed to the increase you see in RevPAR for international.

Okay, understood. Thank you, sir. And if I may just squeeze one last follow-up. I know you don't give guidance on the existing months, probably, or the existing new quarter, Q2. But in terms of just the trend, like occupancies halfway sort of caught up, I think in June, after the tepid season in May. So is there like a upward traction that we're seeing again in July and even August, maybe? Or is it like somewhat sustaining now at June levels, just occupancy for the portfolio?

Yeah, well, you know, in Q3 and Q4 in particular, we see a whole industry move up. And I don't want to make any forward statements. But the only thing that I'd like to highlight is some facts.

First of all, Q1, despite all the issues that we faced as an industry in India, we were able to drive RevPAR, and our endeavor will be to do that in Q2, Q3 and Q4. And I think in Q3 and Q4, our endeavor will be to really maximize opportunity, given we anticipate strong increases in demand, which are customary every year.

Okay, understood, sir. Thank you. I'll come back in queue.

Great, Raghav. Thank you. Please call me Vikram, Raghav. I'd feel much more comfortable.

Thank you. Thank you, Vikram. Okay, thanks so much. Thank you.

We have a question from Amit Agarwal. Amit, please unmute yourself and go ahead. Amit? Yeah, you need to unmute yourself and ask your question. Please go ahead. Yes, he's still facing some issues.

We'll take the question from Vaibhav Dinesh. Vaibhav, please go ahead. Please unmute yourself and go ahead.

Hi, Vikram. Hi, Vineet. First of all, congratulations on a strong set of numbers, despite all the challenges.

Firstly, on your performance in owned hotels versus your own domestic owned and managed hotels. So, occupancy impact in owned hotels seems higher, while ARR growth is much better in the owned hotels compared to domestic, including managed hotels. So is there strategic shift that we are targeting in our owned hotels where the focus is on commanding higher ARRs, even at the expense of occupancy going forward? Is it a strategic shift?

Good afternoon, Vaibhav. No, actually, our endeavor is to maximize rates across our hotels. That, of course, is subject to demand; just applying the simple principles of supply and demand. A lot of our city hotels are EIH-owned hotels. And although, for example, Delhi had a significant impact, Bangalore had a significant impact because of the political tensions, we were still running strong occupancies in the month of April. And by reducing rate, we didn't feel we would stimulate additional demand, because I think it was a crisis beyond our control, and people will choose to travel and not travel, safety and concerns would come first. So we saw a decline in demand, really in pace of reservations and cancellations, particularly as a result of Sindoor.

Got it, sir. My second question was on your pipeline. So I can see there are some delays that have happened quarte-on-quarter. Mainly, I can see the Oberoi Dahabeya 1 and 2, which was supposed to be operational in 2025, is now postponed to 2026. Similar is the case for the Nepal property and few others. So, what was the reason behind this?

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So, these hotels are all managed hotels. And, although we work very closely with our partners, if there is a delay, our influence over those on the timelines, because these are managed hotels, is not as much as hotels that we own or have a significant equity interest in. So, it's nothing more than that. Our endeavor is to work with our partners, be sensitive to their needs, support them the best we can, and open the hotel as soon as possible.

So, I can presume that there is no impact on our own properties' expansion plans? No, that is correct.

Perfect. Just, if I may ask the last question, on the impact of closure of Oberoi Grand and Wildflower Hall. So, what kind of impact was there because of the closure of these two properties? Along with that, what was the impact of closing the airport lounge business? And also, if you can share the revenue numbers for OFS and others.

So, I don't know if we share numbers. Vineet, you just want to take that question? I don't think we disclose numbers for OFS and OAS.

Overall, I will not be able to share anything on the profitability, but on the revenue side, I can just give you an indication. On the Oberoi Grand, between Q1 of this year and last year, we had an impact of 22 crores, on Oberoi Airport Services, the impact was roughly 28 crores.

And that was more than offset by OFS, subsequently. So, that I can assure you. Got it. And about Wildflower Hall?

Wildflower would have been approximately the same, because last year we were consolidating. On revenue front, there was no impact.

Oh, got it. Perfect, sir. That's it from my side, and all the best. Thank you. Thank you so much.

The next question is from Vaishnavi. Vaishnavi, please unmute yourself and go ahead.

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Ms. Vaishnavi – Participant:

Good morning, sir. Thank you for taking my question. I just have one question from my end. This is regarding the exceptional items. Do we see any other future exceptional items to be recorded from the Himachal property, or the current one is the final one?

I would say the current one is the final one. We should not see any more exceptional items coming from Himachal, from Wildflower. Ms. Vaishnavi – Participant: Thank you, sir. Thank you, Vaishnavi.

Thank you, Vaishnavi. We will take the next question from Amit Agarwal. Amit, please go ahead. Please unmute yourself and go ahead. Amit, you need to unmute yourself. Yes, please go ahead. Amit is still facing a problem with his connectivity.

Perhaps Amit could maybe type his question in.

Amit, can you please post your question on the Q&A board, and I'll read it out.

The next question is from Amit Kadam. Amit, please go ahead.

Yeah, hi. Hi, Vikram. So, my question is, I just want to go back to the fact when we had shared this Vision 2030, where we had shared that we want to double our room count, and that we had seen a series of some activities and actions regarding. Whereas now, if I look at the pipeline, what we have shared till almost 2030, it gives me just an indication of 2,000-odd rooms. On a current setting, there's more than 4,000-odd. So, how do I see this thing? How do I reconcile our two-year back Vision 2030 and the current pipeline? Do we have to materially scale up our managed rooms’ efforts so that we’ll at least be closer to that thing? Because on 4,000, we were assuming 4,000 kind of additional. We are ballpark in the range of 2,000. So, we need to bridge the gap of almost 2,000. So, what's the management’s view on this particular?

No, great question, Amit. And all I can say is that all of us in the organization are single-mindedly focused on growth, whether that's through management contracts, through partnerships, etc. And, in just this last quarter, as you know, Vineet ran through the four hotels that we've announced, we continue to focus on this. It has our complete attention. And we hope that with that focus and with that attention, we will be able to drive further opportunities for growth for both, Oberoi and Trident.

So, we should certainly be optimistic about that particular thing, at least being closer to that particular vision, what we had mentioned?

Yeah, I mean, what I'm saying to you is that that is our vision. That is what we're going to work towards.

And, it's very important for us to drive growth. And if you just see the announcements that we've made in the last 12 months, we've still got part of 2026 to go and 2027. So, there's still opportunity for considerable growth. At least I remain hopeful and optimistic.

Okay, nice to hear that. And second, just in the extension of this particular question, as a hotelier, and the things we have seen in the last three years, what are the challenges, new challenges, which have emerged in the last one or two years, which may not allow or would act as a deterrence to this particular vision? What I'm trying to indicate from here is that, we have seen like a couple of hoteliers saying that some clearances are getting delayed. And, in one of the recent comments from you only in today's call, we see that one of the hotels moved from ‘25 to ‘26. So, what are the challenges, be it regulatory, be it human resource, or be it some new greenfield land level thing? So, just wanted to hear from you, what are the challenges the current hoteliers have started seeing in the last one or two years because of the rapid expansion from all the hotel companies across India? Yeah, that's it.

No, thanks, Amit. I don't know if there's anything that has changed substantially in the last one or two years. I think during COVID, and this is my personal view, is that I think we, as hoteliers or the hotel industry, were not kind to our colleagues. There were large layoffs of people. And this really pains me a lot. You know, as human beings, we should be supporting one another, at least people within our organization or within the companies that we work.

And, as a result of that, you can look at admissions to hotel schools. There's enough published on this to see that positions were vacant or admissions were lower; positions remain vacant. So, one area of concern is, of course, people, and that's core to who we are and core to our business. We stand by our colleagues, we support our colleagues. And that is a very, very important value for our organization. But human resource is a challenge for the industry.

What hasn't changed is the approvals, the delays as a result of that. Those things haven't changed in the last two years; they existed even before. And that can cause delays for hotel openings.

Land is also another issue, securing land. Land values are very high. In city locations, you have to look at mixed-use developments. And, obviously, location is key to a hotel's success. I don't know if I've answered your question. I'm just trying to think if there's anything else.

But let me talk about the positives, right? Let's not focus on the negatives. I think our economy is growing strongly. The ability to spend on high-end experiences and products is strong and growing rapidly. So, I think there are many, many positive things that are happening in our country, driven by strong economic growth, and these will continue into the future. So, I think there's a lot to celebrate and we should just not focus on the negatives. Let's focus on how do we capitalize on the positives. And, at least, not worry about negatives that are beyond our control.

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Fair enough. I'll just fall back in queue. I have a couple of more questions. I'll come back. Okay, great. Thanks, Amit.

Friends, I request you to limit yourself to two questions because there are a lot of participants waiting in queue. We'll take the next question from Abhishek. Abhishek, please go ahead.

Yeah, hi. I just see there's a rental income from investment property in the Annual Report for FY25.

What is that, and from what are we getting that money for?

That rental income is mainly coming from Oberoi Centre, which is our building in Gurgaon.

This is just to give you a little bit more detail. We have the Oberoi Centre, which is in Cyber City in Gurgaon. It's roughly about 110 sq. ft., and it's a seven-storey building. We occupy one of the floors, which is the top floor, and the others are leased out to various parties. One of our key tenants there is BMW that's taken multiple floors.

Okay. And there's another, just a follow-up question on the flight business. Out of 2,700 crores of revenue, which we have booked for FY25, how much of that is from the flight services business? I'll leave that to you, Vineet.

I'll give you the Q1 numbers. We had roughly 110 crores. That's the figure I can share, but nothing more than that. But for FY25 on a whole year basis?

FY25… I can share the numbers separately. I don't remember the number, and I don't have that handy with me.

Just to understand, why are we not very transparent about revealing these numbers for this business? Is there a reason for it?

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I don't think there's a reason for it. We'll certainly look at it, but at this point, we're not. And Vineet and I will have a chat about seeing how we can include that going forward. But what I will say is that the Oberoi Airport Services had very strong revenue and very strong flow through to EBITDA. And what I can also say to you is, despite that business closing with the lounge contract coming to an end, we've been able to offset that at an EBITDA level as well with the flight kitchen business. So, there's strong demand. Our focus is on international flights where margins are better, and the business is doing very well. But what we will look at is seeing whether we can give you or share with the market, details on that business.

Yeah, sure. And another thing, if we want to connect with you offline… Abhishek… It's not a question. If we want to connect with you offline, how should we do that? Writing to the investor department, or how should we do that?

Yeah, I mean, maybe you can be in touch with Navin, and with Navin's help, we can do that.

Abhishek, my email ID and number are there on the invite. Maybe you can just drop me a mail, and I'll take it. Sure, sure. Thanks.

Before we take the next question from Sangeeta, may I just read out a couple of questions on the board? Sure.

Amit, who's been trying to come on to ask his question, he says, just wanted to tell Mr. Vikram that last week I was in Lombok, and it's an amazing property. But my suggestion is that you need helicopter services as it is a remote island.

Yeah. No, the hotel is a fantastic hotel, and Amit, I'm so glad you stayed with us. I hope we looked after you well, and you were happy with the service and the lovely people we have who work at that hotel.

Touch wood, our guest feedback is very positive. I think with a helicopter service, if you have to underwrite that, it's a substantial commitment and a substantial risk. And therefore, it's something we haven't done. You can… there are regular flights from Bali and also from Kuala Lumpur and, I believe,

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Singapore, perhaps now as well, to Lombok. So, access is a little bit easier than it was previously. And there's also a very convenient… in fact, what I normally do if I'm in Bali is I take the… there's a ferry crossing. It's a high… it's like a large boat, which is very comfortable and takes you from Bali to Lombok in about two and a half hours, and it's quite a nice experience as well. So, there are many ways to get to Lombok. We'd be hesitant to look at a helicopter service because I think there's a risk associated with that, and you need to underwrite it, which we wouldn't want to do. But the hotel is… I mean, right now the hotel is doing very strong occupancy. This is peak time for Bali and for Lombok, and touch wood, both hotels are doing very well.

Thanks, Vikram. Okay, here's his questions. My two questions are regarding the London property that we are coming up, with boutique properties. Do we own the land? And are there any restaurants and shops coming there along with the rooms?

Yeah, no. So, absolutely with the Mayfair Hotel, it's a 125-year lease from Grosvenor Estate. So, we don't own it, but it's on a very long-term lease of 125 years. And there will be a restaurant, and absolutely, a bar, and nice common spaces for our guests as well at Mayfair London.

And the second question is that we're doing a lot of managed deals. Are they for a particular period, or the contracts are for an infinite period?

Contracts for hotels are never for an infinite period; they are for a specific number of years. And these are varied, you know, from 20 years upwards. And there's also typically, in hotel contracts, renewal clauses for another 10 or 20 years. So, these are very long-term contracts. Thanks, Vikram.

And I'm talking about the industry in general, and we are no exception to that.

Okay, question from Anshul Chaurasia. As a hotelier, what is the targeted IRR for acquiring a new property? And whether it's a Greenfield or a Brownfield project?

Can we… I don't know if we can… do we disclose? I mean, I have no issue looking at our internal benchmarks, but I don't know if Vineet might share that. His question is on ARR, right?

No, no, IRR.

Of course, I would say we have a benchmark. Considering, we have to take into consideration the return on equity for the shareholders, as well as look at the debt levels which the company can afford. It's a decent double-digit IRR which we look for, but I'll not be able to give you the specifics.

But may I just say one thing which may give you some comfort is, that we have internal benchmarks that we strictly follow on IRR, and in terms of enterprise value as well. And it's something that we… when we do our projections, whether it's for an owned or managed hotel, even for managed hotels, we always run the numbers of how we feel we can perform. And we do that with honesty and integrity with our partners. So, we really present what we believe is a true and fair picture. And we tend to be conservative.

I'll give you an example. I won't mention the hotel. But us, when we did a study and shared the numbers for occupancy ARR, etc., and P&L… let me not even, because it was really on revenue side, on the cost sides, we're reasonably efficient. It was substantially lower than what was subsequently shared by a consultant. So, we are conservative with our projections. We make a commitment to our partners, and we want to not only meet those projections, but exceed those. And that will hold us in good stead in terms of building a strong foundation of trust and a strong relationship with our partners. We don't want to ever be in a position where we let people down.

Thanks, Vikram. We'll take the next question from Rupam Jaiswal. What's your view on upper luxury segment, and how do they trend in terms of ARR and occupancy? And does international travel lead there? Is this bound to see exceptional growth in future, and where are we placed?

Yeah. So, we've seen, if you look at… let's take a 15-year horizon. We've seen a dramatic change in the contribution of our Indian guests to overall revenue. And I'm now specifically talking about leisure since the question was at leisure, but this applies to all our hotels. And we remain very optimistic that, that trend is going to not only continue, but increase at a more… even a greater pace, a more rapid pace of growth, just given what's happening in our country. So, that's the first point.

The second point is, that international travel and international guests staying at our hotels, they're not the… our Indian guest is the single largest segment, followed by the US and the UK, and it's a very, very important segment for us. I know you'll be familiar with figures released by the government on growth of international travel to India. And I think we'll all benefit, the industry will benefit if we achieve those targets. And our country, of course, will benefit if we achieve those targets. So, I think we should really see how we can work in partnership with the government, both at a Central and State level, to drive our foreign visitors to our country. It brings in foreign exchange. It also creates ambassadors to our country.

And I'm sure, that translates into business opportunity as well.

Thanks, Vikram. We'll take the last question on the Q&A board before we get back to the Question & Answer forum. What is the occupancy for full year FY25 at consolidated level?

I think it was, I feel like saying 78%, but just give us one moment.

This was from Vineet Bajaj. Vineet, just hang on for a second.

For EIH hotels, mainly for EIH hotels in India, we were running occupancy for the full year at 80.7% last year.

Thanks, Vineet. Okay, friends, we are in the last 10 minutes of the webinar. So, request you to limit yourself to just one question and make it short. Thank you.

We'll take the question from Sangeeta. Sangeeta, please unmute yourself and go ahead. Sangeeta, you need to unmute yourself.

We'll take the next question from Rajiv Bharti. Rajiv, please unmute yourself and go ahead.

Yeah, hi. Good morning, sir. So, I have three questions, actually. So, one thing is actually CapEx part of it. Now, when I see the schedule versus, let's say, Q2 FY23 of various projects you have given, then out of the, let's say, ‘21, and now they're scaled to ‘25, 14 are delayed by close to a year, and four are delayed by close to three years. So, this is in terms of timelines which we are giving, how confident are we that these will be met? And, in that way, very happy to see that the Gir is back in the fold again.

Thank you. Like I mentioned, our endeavor with hotels where either, it's owned by EIH or has substantial equity, we meet the timelines that we set. That's important for us. Sometimes that's not always the case, and I don't know if I can get into specifics to just give examples. Maybe I shouldn't. Because I can think of one EIH associated hotel where there's been a delay as a result of some land-related issues. But we've now solved those, and we're pressing on with that.

With managed hotels, like I mentioned earlier, we have far less control. And Diriyah, for example, is one of those where there's been a delay. We're opening the first hotel in Diriyah next year, but there was also a second hotel which has been delayed, and that is really beyond our control. It's a Diriyah Gate project, and there have been delays or deferment of certain… or certainly of our hotel. And so, that's really what I have to say.

In summary, for our owned hotels, our endeavor is to meet the timelines we set. And sometimes, there are things beyond our control. And, as an example, one specific land-related issue with our partners, if there are delays, we see how best to work with them to meet the earliest possible timelines for opening the hotel.

Sure, sir. So, regarding EIH International, when we are seeing this last four-quarter performance, we have seen 20% RevPAR growth. But when I compare the annual numbers, they have moved up, I think, by 3%, 4%. So, what is the seasonality in H1, H2 in this business?

In fact, in places like Indonesia, the Q2 of our financial year and Q3 are strong, because they have their rainy season that starts in November, if I'm not mistaken. So, it's, in fact, in many ways, opposite to ours.

Egypt, on the other hand, is, again, occupancies pick up in the winter months, similar to India, because it's very hot. Marrakesh is also similar, because summers tend to be hot there. So, winters are typically periods of higher occupancy. And Mauritius, its seasons are reversed. So, again, summer months are better in Mauritius. Sorry, their summer months are better, which is our winter, because it's a reverse season. So, it really is a mixed bag, to answer your question.

Lastly, Oberoi Hyderabad, is it a conversion, or this is a greenfield asset? It's a greenfield. That's all from my side. Thanks. Thank you very much. Thanks, Rajiv. Navin, you're on mute.

Vineet, how much time do we have? Because there are some questions on the Q&A board, some participants lined up.

I have a meeting at 12:00, Navin, but I can… I mean, if I'm five, as long as I'm not too late. So, maybe a few more minutes, or we can also ask people to send their questions through. I’ll leave it to you.

There are all follow-up questions from Vaibhav, Raghav, and Amit. Guys, request you to send me your questions, and I'll forward them to the management, because Vikram's already running late for his commitments.

I'm really sorry, Navin. Maybe next time I'll set an hour and a half aside. I'm sorry.

So, friends, may I hand over the floor to Vikram and Vineet for their closing remarks before we wind up, please. And just one second, I'm sharing my email ID, so any follow-up or unanswered questions, request you to write them to me and take them up. Yeah, Vikram, please go ahead.

Navin, I don't have much to add to whatever I've already said and the questions that I've answered. If I were to give an overall perspective, I still am optimistic about the India story. I think EIH will benefit from that. And we continue to work in the premium segment, which we believe is a segment that has tremendous opportunity in our country. We continue to drive ARR to the best of our ability.

So, yeah, we remain optimistic. In any business, you have ups and downs, and what happened in the month of May that extended into June, had an impact on all of us. So, those risks always do exist.

And I would like to add that we continue to drive our vision 2030. And we are working on that goal, but I would say we are focused to deliver what was committed two years back.

On behalf of SKP Securities, thank you very much, Mr. Oberoi and Mr. Kapur, for taking time out to patiently answer all the queries. And we look forward to hosting you again in the next quarter. Thank you very much. Thank you, ladies and gentlemen.

Thanks, Navin. Thank you very much, everyone. Thank you. Bye-bye. Thank you.

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