Hotels, eateries have their plates full in Q1, some even post record numbers

Despite a challenging inflationary environment, global geopolitical tensions and the pandemic, hotel chains and restaurant companies have reported impressive results for the April-June quarter with some even posting record numbers.

Industry experts said the near-term outlook for the sector looked promising, too.

Tata Group-backed Indian Hotels Company (IHCL) posted revenue from operations of ₹1,266 crore, an over three-and-a-half-fold increase from a year earlier when the hospitality industry was beset by the second wave of Covid-19. It also posted a profit of ₹181 crore, compared with a ₹302 crore loss during April-June 2021.

Chief executive Puneet Chhatwal called it the best fiscal first quarter in the company's history.

Considering the one month gone by in the current July-September quarter and existing business on the books, the recovery looks strong, he said.

"Whether it is the conference business, restaurants or rooms, India is strong. People have become more used to taking risks and hotels are buzzing. It is important that the pricing is improving. It was much needed and very long overdue," he added.

EIH Ltd, the flagship company of the Oberoi Group, also swung into the black with a profit of ₹66 crore for the quarter ended June 30. It had posted a loss of ₹114 crore in the year-earlier quarter.

For Lemon Tree Hotels, revenue from operations grew more than four-and-a-half times to ₹192 crore. The chain clocked a profit of around ₹14 crore as opposed to a loss of ₹60 crore in the quarter ended June last year.

Signalling rising spending on both dine-in and delivery, restaurant chains also claimed to have posted record numbers.

Anjan Chatterjee, chairman of Speciality Restaurants, said the company had posted its best ever quarterly results.

Speciality Restaurants - the fine dining restaurant operator that counts Mainland China, Asia Kitchen by Mainland China, Oh! Calcutta and Sigree-Global Grill as its key brands - posted revenue ₹98.6 crore and a profit of around ₹15 crore.

"The sector, on a macro level, will continue to do well. People have adapted to the new ways of living and are eating out a lot more. We were shutting the non-profit-making stores anyway, but the pandemic pushed us even further," he said.

"The pandemic taught us we need to work with less manpower as it was a question of survival. We re-engineered the menu and looked at every possible optimisation of cost. Before the pandemic, delivery was about 7-8% of our total business. Today, it would be about 25-28%. These learnings have been ingrained in us."

Barbeque Nation said it achieved the highest quarterly revenue of Rs 315 crore for the quarter ended June and a profit after tax of Rs 16 crore as against a loss of Rs 44 crore in quarter one of the last financial year. Westlife Development said it had posted record quarterly sales of Rs 536 crore. Westlife Development sets up and operates quick service restaurants (QSRs) in India through its subsidiary Hardcastle Restaurants Private Limited (HRPL). HRPL is a McDonald's franchisee with the right to own and operate McDonald's restaurants in West and South Indian markets.

To be sure, the country was facing the devastating second wave of the Covid-19 pandemic in the April-June quarter last year, which had a significant impact on the performance of the hospitality sector. The threat of Omicron and the third Covid wave in the January-March period this year had threatened recovery, but the impact was much less than what was feared.

According to JLL’s Hotel Momentum India (HMI) Q2, 2022, a quarterly hospitality sector monitor, Revenue Per Available Room (RevPAR) in April to June witnessed an 'exponential' growth of 339.3 % year-on-year. The sector saw a 44.6% growth in RevPAR compared to January to March this year.


Jaideep Dang, managing director, Hotels and Hospitality Group, South Asia at consultancy firm JLL, said the April to June quarter marked the revival of investor interest and stakeholder profitability in the hotel industry. "As business travel and corporate off-sites continued to grow, summer holidays offered a further impetus to the overall demand, resulting in a renewed confidence in the sector. We expect this momentum to continue over the next few quarters on the back of long weekends, festivals, weddings, events, and business travel evenly contributing to this growth story," he added.

Karan Mahesh, account manager for Central and South Asia at industry tracker STR, said preliminary STR numbers show that the July performance for India was somewhat on the same lines as in June. “Hence, we can expect to see July close with similar results, with all India occupancy in the ballpark of 65% and average daily (room) rate coming in at around Rs 5,800,” he added.