The country?s oldest hospitality chain EIH, that runs hotels and resorts under the Oberoi and Trident brands, has blamed the government for not enabling growth saying that the Centre had no policy on travel and tourism, which made the basis of the sector?s performance.
EIH executive chairman PRS Oberoi, after the company?s 63rd annual general meeting, said for the last three years the travel and tourism industry did not find any mention in the finance Bill. ?We cannot build roads or create sewage facilities. Cities like Mumbai, Delhi and Kolkata gets drowned in a little rain. In Mumbai and Jaipur our hotels have to buy water in tankers. So how will the industry grow,? Oberoi said.
He said EIH?s performance in the first quarter of FY14 was better than the industry standards with profit after tax growing 12% year-on-year to R10.55 crore. Occupancy increased to 64% during the quarter from 55% during the same period a year before and RevPar increased 9% y-o-y.
?The size of the cake is not increasing. One is gaining at other?s loss,? SS Mukherjee, vice-chairman and CEO, said adding that Indian business travel was low and foreign tourists were not coming. The weak economic environment in the source markets in the US and Europe was also adversely impacting the hotel industry, Oberoi said.
However, EIH is getting into managing hotels at Maracas and Casablanca and in both the cases it would either have a negligible stake or no stake at all.
Mukherjee earlier told FE that at the Oberoi Hotel at Maracas, Morocco, EIH would hold 25% with three more partners jointly developing the property. EIH would invest around $ 4 million and it would be developed as a mixed-owned property. The project would take another 3-4 years to come up, Mukherjee said. On whether EIH would hold equity in the Casablanca property, Mukherjee said, ?How far we go beyond managing a hotel will depend on the project.?
He told FE that Greece was another destination at which EIH was eying on behalf Reliance to acquire a property.
Oberoi said EIH would ink an agreement on August 8 for managing a hotel at Anzam in UAE. The group opened Oberoi Dubai on June 15.
In India, EIH has abandoned its JV project with L&T in Bangalore and its JV project with the Kerala government in Kerala. It is awaiting the Kerala government?s clearance to sell the land it acquired for developing the project. In Himachal EIH?s project is mired with court cases, Mukherjee said. ?The proposed projects in Goa and the one with Reliance in Navi Mumbai is alive,? Oberoi said.