Operating profit is also likely to drop from Rs 43.61 crore in 1997-98 to about Rs 35-36 crore in 1998-99. Consequently, the net profit is expected to go down from Rs 31.72 crore to about Rs 26-28 crore in the current fiscal.

Company sources attributed the drop in turnover and profit to the recessionary trend in the hotel industry including falling occupancy levels and mismanagement on part of its erstwhile partners Hilton International.

Hilton had not bothered to promote the hotel properly and had made no plans for securing advance bookings, sources added.

Interestingly, Bharat Hotels had called off its management agreement with Hilton last March blaming the foreign hospitality major for the poor financial performance of the company in the previous fiscal too. Subsequently, the company had entered into a marketing agreement with Inter-Continental Corporation.

The company's Mumbai and Goa hotel projects are also understood to have been delayed by over four-five months due to a delay in receiving all the necessary approvals. However, there will be no cost overrun, company sources maintained.

Bharat Hotels has undertaken a Rs 300 crore expansion to set up three hotel properties in Mumbai, Goa and Srinagar. The Rs 160 crore 400-room five star super-deluxe hotel in Mumbai is now expected to be operational by end-2000 than mid-2000, as anticipated before.

The three properties will carry the brand name of Grand, which has been registered for all units of Bharat Hotels.

Due to the delay in the projects, the company has also decided to go slow in raising $10 million through external commercial borrowing (ECB) for which it already has all the necessary approvals.

Besides the ECB, the company had planned to fund the expansion through internal accruals including a $19.5 million global depository receipts (GDR) issue in 1996. The GDR amount, which is also untapped so far, has now increased to over $22 million, sources added.

The recessionary trends in the industry have not only taken their toll on Bharat Hotels but other leading hotel companies are also expected to announce drop in turnovers and profits this year as tourist inflows have not shown any improvement in the peak season beginning October.