EIH Limited (EIHOTEL) Q3 FY23 Earnings Concall Transcript

EIH Limited (NSE:EIHOTEL) Q3 FY23 Earnings Concall dated Feb. 14, 2023.

Corporate Participants:

Vikramjit Singh Oberoi — Managing Director & Chief Executive Officer

Kallol Kundu — Chief Financial Officer

Navin Agraval — Investor Relations

Unidentified Speaker —

Analysts:

Tarang Agrawal — Old Bridge Capital — Analyst

Saket Kapoor — Kapoor and Company — Analyst

Nihal Jham — Edelweiss Financial Services Limited — Analyst

Vikas Ahuja — Antique Stockbroking — Analyst

Rajiv Bharati — DAM Capital Advisors Limited — Analyst

Sumant kumar — Motilal Oswal Financial Services — Analyst

Saurabh Patwa — Quest Investment Advisors — Analyst

Unidentified Participant — — Analyst

Jinesh Joshi — Prabhudas Lilladher — Analyst

Rajiv Gala — JM Financial — Analyst

Presentation:

Operator

Good day, ladies and gentlemen, on behalf of EIH Limited and SKP Securities it’s my pleasure to welcome you EIH Limited’s Q3 FY23 Earnings Webinar. We have with us Mr. Vikram Oberoi, MD and CEO; and Mr. Kallol Kundu, CFO. All participant lines have been muted. This meeting is being recorded for compliance reasons and during the course of the discussion, there may be certain forward-looking statements, which must be viewed in conjunction with the risks that the Company faces. We will have the opening remarks and a presentation by the management followed by Q&A session.

Thank you and over to you Mr. Oberoi.

Vikramjit Singh Oberoi — Managing Director & Chief Executive Officer

Good afternoon, everyone and welcome. I’ll just quickly cap on a few important touch a few important points. As a company, starting with our Founder, we’ve always focused on our guests. And our guests continue to be our primary focus. We measure guest satisfaction using Net Promoter Score, unfortunately, we continue to deliver high levels of post slice can attention for which I would like to thank our colleagues.

As a result of the loyalty we have from our guests in all our locations of which all our locations we are well-above on RGI we exceed market-share and since pre-pandemic levels that has grown further and Kullol will talk a little bit about that and margins etc., in his presentation that he will make. In most locations also, at least as far as Oberoi Hotels is concerned, STR 1. So not only we have increased our market-share over our comp set, but we also ranked 1 on STR. With that I think maybe last thing I’ll say is quarter three has been a very good quarter for the industry and equally for us and Kallol will cover that in his presentation as well.

So I will pass it on to Kallol to make the presentation and then we’ll be happy to answer any questions that you have. Thank you.

Kallol Kundu — Chief Financial Officer

Thank you, Vikram, and good afternoon to all of you. It’s a pleasure to be back. I hope my screen is visible and I am clearly audible. So just start with some of the key highlights, as has been articulated by [Indecipherable] for the three months October, November and December, so three key highlights as pertaining to our industry and to our company is industry months November ’22, the Indian hotel industry recorded its best-ever performance since the pandemic began with occupancies ranging from 68% to 70% and with average room rates exceeding INR7,000. The domestic air traffic in India as we all know has increased by 0.5%. In November [Technical Issues] compared to the previous month and increased by 9% in December ’22 over the previous month.

I hope you are audible, Naveen. If you can just confirm.

Navin Agraval — Investor Relations

Sorry, I’m not sure if you are audible and visible.

Vikramjit Singh Oberoi — Managing Director & Chief Executive Officer

Yes, you are very much audible Mr. Kundu.

Kallol Kundu — Chief Financial Officer

Thank you. Thank you so much. So Mumbai was the market-leader in November ’22, and December ’22 with — [Technical Issues] We have some good news to share here to you. With respect to the hospitality industry EIH has performed really well. We’ve we measured this through two parameters, one is the relative RevPAR growth of EHS compared to industry.

So as you can see here, the industry grew by between 3% to 4% versus pre pandemic levels in October. 1% to 3% against pre-pandemic levels in November, and 12% to 14% in December. Vis-a-vis these numbers EIH domestic hotels have grown by the RevPAR of EIH domestic hotels have grown by 19% in October pre-pandemic versus pre-pandemic, 17% versus November and 34% in December versus the pre-pandemic levels.

The other interesting thing to note here is, if we were to consider the top-five hospitality companies in India by market cap, which as on 31st December totaled about INR75,000 crores. The median PAT margin after exceptional items and this is for consolidated accounts was 20.8%, the average in quarter three was 15.9% and is the highest at 24.9% in this concept of five companies that I’ve just mentioned in terms of market capitalization.

The same trend is visible in the nine months, where the median is 13.1%, the average is 12.2% and EHA is 17.2%, again this is a PAT margin excluding exceptional items and this is for consolidated accounts. The reason why we believe our positioning in terms of our RevPAR growth, as well as our profitability is high is clear in this slide, where you would notice that our — we are ARR focused company, a price focused company and a quality focused company. And therefore, we make sure that our average room reached our relatively higher than industry, which is visible from the continued very-high ARI, the ARR index right from April 2019 to December 2022. So this is essentially the orange line.

The market penetration index, which is a ratio of the occupancy of EIH domestic hotels. On the Oberoi domestic hotels versus the competition may be lower, but as — but that doesn’t really matter to us. Because as a result of the high ARR, we continue to have a high RGI which is consistently above 100 except the single month of June 2020, since the period April ’19 and up to December 2022. This clearly shows our focus on rates yielding and this is actually making us the most profitable company.

As we move on, just to remind everybody that we were voted as the best hotel brand in the world and the travel and leisures won best award 2022 and even the previous one we were voted the best. So in terms of quality, in terms of regions preferences also we continue to be number one.

From a balance sheet perspective, I think we have a strong foundation. As you can see on the strong foundation has only strengthened over the quarters going from December ’19 up to December ’22, our balance sheet strength has continued to evolve and improve. With our debt-equity ratio now as on 31st December as well as 0.05, but the net-debt only at INR60 crores. So we are well-poised for all growth initiatives that we are going to take, which will ensure that we have adequate internal funds, as well as we have a sufficiently good capacity to borrow if need be.

The current ratio is also healthy at one, which will give a lot of comfort to our creditors as well. The weighted-average cost of debt as on 31st December ’22 was 7.8%. If you see in terms of financial agility, EBITDA margin has improved from quarter three of FY ’20 to quarter three of FY ’22 by 4 percentage points from 33% to 37%.

Payroll as a percentage of revenue has come down from 26% to 22% in the same-period. And the total expenditure as a percentage of revenue has also come down from 67% to 63%, using the same periods. Financial agility is also demonstrated in this in this chart, where you can see the consumption of provisions, wines and others has gone up by only 2%, power and fuel has increased only by 3%, repairs and maintenance has increased by 26%, but that is primarily because as a company, we believe that it’s important for us to ensure that our upkeep of hotels was absolutely in pristine condition, administrative expenses have also grown by 17%, payroll and related expenses have grown by only 1% this quarter.

So overall, the total expenditure has grown by 10% when compared to quarter three of FY ’20 whereas the revenue has grown by 17%. So definitely I think the operational efficiencies that we achieved during the COVID is kicking-in. Q3 performance as Vikram highlighted has been stellar. So if we want to consider the EIH owned hotels, as well as the domestic hotels, the Q3 RevPAR is at the highest at INR13,332 for EIH hotels and INR12,805 for all hotels all domestic hotels taken together, and the two asterixis would show the comparison between quarter three of the normal year which was FY ’20 versus the current quarter. So from INR10,473 to INR13,332 a RevPAR increase of almost 30%.

The same is reflected when we break it down into monthly occupancy and ARR. When we look at it month wise so from October, November to December, November obviously has been an excellent month, it was an excellent month but December has been even better. So going up from up from 67% in October to 79%. Sorry, this is — yeah 79% and going up to 83% in FY ’23 October, November, and December. The same scenarios in case of the monthly ARR, where the average room rate has gone up from INR15,167 to INR16,568 to INR18,107, and effectively this is the quarterly occupancy in ARR, which is shown in the slide on the right.

If you want to look at it city wise, the highest-growth in our case has come in when you compare it vis-a-vis FY ’20 and all comparisons are with the normal year, because we believe that it’s important to note how we are performing versus what it was normal before COVID. So Shimla and Chandigarh has registered a 60% growth in RevPAR, followed by Bengaluru at 35%, followed by Udaipur, Jaipur, Mumbai and Delhi. Hyderabad and Bhuvneshwar has been slightly lower at 18% and 15%, Kolkata is 2% and Agra unfortunately there’s RevPAR de-growth of about 7%.

If you want to divide the performance that we just saw in terms of the various categories of hotels that we have. So in Oberoi Metro, Oberoi Leisure, Trident Metro, Trident Leisure, Trident City and others. So the highest — the best-performing segments have been there Trident Metro and the Oberoi Metro properties which is something really positive for all of us. Oberoi Leisure is also good, but it’s really heartening for us to see that the metro cities have been performing, because a large part of our inventory is in the metro cities.

The average rates are here. I would leave it to you all to see this chart in detail, when you do your analysis. There are strong tailwinds along most all segments with the highest tailwinds coming in terms of direct business, followed by corporate, but in December as we see are in the quarter three of FY ’23 as we see, even leisure and [Indecipherable] not fair enough modern room rate, this is the question normally, generally people have as to what part of foreign roommates have come back. So the bold lines are the ones which relate to the months in the current financial year and the dotted lines are the ones which are relate to FY ’20 of the corresponding months.

So if you want to look at all our hotels in the month of December for instance, while 60% of the room nights were foreign room nights in December in FY ’20. It’s 44% as of now if you take the Oberoi hotels. If we take all the hotels it was 54%, now it’s 37% and if we take only Trident hotels it was earlier at 50% and now it’s at 32%. This really gives us a lot of reason to of encouragement, because with foreign travel going up, we can expect the performance to be even better.

Looking at food and beverage revenue, very positive news again. While our hotel F&B revenues have grown by about 18% as compared to quarter three of FY ’20. The one positive news that we have for our flight catering and airport lounges as the revenue in this segment has grown by 57% when compared to quarter three of FY ’20.

We continue with our carbon footprint initiatives and we will come up with more in the quarters to come as we progress. But this is just a snapshot, wherever we implemented our solar plants, our average cost of electricity has come down from nine INR10.9 per unit to INR5.9 per unit and they too it’s not as if it’s 100% solar. So there are this shows that there is indeed a long way to go of for all companies in India.

The hotels which consume renewable energy is listed out here, Oberoi, Gurgaon; Trident, Gurgaon; Oberoi Bangalore; Trident, Chennai; and so on and so forth. The performance highlights you would have already seen as our results were declared. We ended the quarter three standalone with PAT of INR104 crores, including exceptional item of INR21 crores and I must state that the management has been really aggressive in terms of making sure that we are conservative in our accounting and we continue to strengthen our balance sheet.

But despite that, our PAT has grown from FY ’22 quarter three of INR32.6 crores to INR103.9 crores. As we see quarter-on-quarter revenue has grown, again standalone results from INR449 crores in FY ’20 to INR525 crores in FY ’23, the quarter three. Our EBITDA has increased from INR146 crores in-quarter three of FY ’20 to INR193 crores. PBT before exceptional items has gone up from INR99 crores in FY ’20 to INR157 crores. PAT has gone up from INR75 crores to INR104 crores and total comprehensive income from INR73 crores to INR111 crores.

Consolidated results also reflect of what we saw in standalone. Our revenues up from INR534 crores to INR603 crores; EBITDA up from INR178 crores to INR226 crores; PVT up from INR136 crores to INR187 crores before exceptional items. PAT up from INR103 crores to INR149 crores and TCI up from INR100 crores to INR157 crores. On the expansion plans, we already had I mentioned this in the previous quarter and as we go along in further quarters there will be many more announcements to come, but as we speak we had promised a vehicle club opening which has opened in November 2022 in Mumbai, there is a restaurant that is under — it’s nearing completion and will be open in Mumbai. It’s a standalone restaurant in March ’23.

The hotels, which are scheduled to open in FY ’25 are Rajgarh and Bandhavgarh with 48 and 24 keys respectively and Bardia in Nepal, it’s a managed hotel with about 18 keys. New Oberoi Rajgarh is of course owned in FY ’26 this hotel in Kathmandu, Wadi Saffar, Saudi Arabia and Trident, Tirupati has been signed-up, the lease has been signed-up by our subsidiary, our 60% subsidiary, which is Mumtaz Hotels which will be managed by EIH limited. In FY ’27 hotels in Goa and the second property in Al Zorah, but of course under active discussions there are three Oberoi hotels, seven Trident hotels and one service apartments, and we will articulate these more as we go-forward. Just for everybody’s information, the business footprint this is more from an information point-of-view, so I won’t dwell into this much. And as a snapshot, we have 24 hotels and resorts in India with 3,750 keys as on date and 497 keys across the globe.

With that, thank you from my side and will forward to any questions that you may have.

Questions and Answers:

Unidentified Speaker —

Thank you, Kallol. That was quite exhausted. We just wait for a couple of minutes and we can start Q&A session thereafter. Anyone who wishes to ask a question may please raise their hands. We will unmute you and take your questions. The first question is from Tarang Agarwal. Tarang, please go-ahead.

Tarang Agrawal — Old Bridge Capital — Analyst

Hi. Good afternoon and congratulations for a stellar performance and rather elaborate presentation. Just a couple of questions on the trends and how you all are seeing it. Firstly on occupancy, historically, how high can the occupancy number go from the current levels?

Vikramjit Singh Oberoi — Managing Director & Chief Executive Officer

Well, theoretically, they can go up to 100%.

Tarang Agrawal — Old Bridge Capital — Analyst

And have you seen that happen any time in the past?

Vikramjit Singh Oberoi — Managing Director & Chief Executive Officer

We’ve seen that happen in the past many years ago. If I remember correctly, the Oberoi New Delhi did a 100% or very close to a 100% occupancy. I mean, I’m going back a long time. But you can certainly run occupancies into the 90%. We’re doing that currently at the Oberoi Bangalore where the hotel is running well into the 90% occupancies.

Tarang Agrawal — Old Bridge Capital — Analyst

Okay. Now, the second question is, I noticed that the foreign travel is not back yet, and a large part of your occupancy is actually being driven by domestic tourism. I mean, just wanted to gather a sense on what is the longevity of this, because there is a reasonable amount of latent demand that might have perhaps shown up in this quarter. So perhaps assuming if foreign travel doesn’t come back soon, how are you seeing this — how are you seeing it in your current quarters and maybe if you could give us some sense on how do you see this trend that we’ve seen in Q3 moving forward?

Vikramjit Singh Oberoi — Managing Director & Chief Executive Officer

Well, everything that we see and we look at our data regularly both business on books we project future occupancies by hotel. And all those trends continue to be very, very strong. I think that will be augmented with foreign travel, which is going up and hopefully will continue to go up. So, I think across all segments, if I were to just summarize, we’re seeing strong growth in our forecast that is continuing and we have no reason to believe that will not continue into the future.

Tarang Agrawal — Old Bridge Capital — Analyst

Got it. Just a couple of more. In terms of all the plans of opening new hotels, whether through management contracts or your owned properties, a ballpark capex estimate from here on would be helpful for say FY ’23 and FY ’24. That’s one. And second, I think you’ve done a tremendous job in terms of pruning your employee expenses. But when I see it on a relative basis to other players operating in the industry, I mean, even today EIH is significantly higher than players and that would, perhaps, I mean that’s how the business model is. But what I wanted to understand is there a scope to prune further or is this a good number that we should look at going forward from here?

Vikramjit Singh Oberoi — Managing Director & Chief Executive Officer

No, actually, Tarang that’s a very very good question that you asked. Our industry has been plagued with very long working hours across our companies and of course, hotels. And our commitment is to address that fully. So — and I think what would be interesting to know is what attrition levels are at hotel companies, the higher the attrition, a lot of productivity. So in the short-term, we have made a commitment to reducing the number of work hours the people work, looking at work-life balance which continues to come year-after year-on our own surveys. Our Concentrix surveys were committed number-one to addressing that. Number two is with attrition. Hopefully, that will bring down attrition substantially and increased productivity substantially. So I think in the long-run, we will see greater efficiencies. And we certainly are committed to doing that.

Tarang Agrawal — Old Bridge Capital — Analyst

Thanks. And then number of capital outlook for the next two years.

Vikramjit Singh Oberoi — Managing Director & Chief Executive Officer

I don’t have that with me. I don’t know if Kallol has that readily available, but we can certainly include that going forward.

Kallol Kundu — Chief Financial Officer

I think, Tarang, I would rather refrain from discussing capex at this stage, because we are just beginning our — we are just completing our budgeting exercise as we go along. So the regular capex that we will have in hotels will be similar to what we used to have in pre pandemic levels about INR40 crore to INR50 crore. But for the projects that we have listed out there is only one project at the moment, which is own project where we are spending money and that shouldn’t be anything substantial. As you can see that our debt levels are INR60 crores only. As on 31st December and I would urge you to look at that number again in 31st March. So therefore, it’s not really too much of a concern for us. But having said that, we will be in a position to tell you, maybe, in the last quarter when we have already completed our budgeting exercise.

Vikramjit Singh Oberoi — Managing Director & Chief Executive Officer

And I just wanted to add one further thing that for us, our focus on growing the number of hotels we have is our biggest priority and we work — not a day goes by when we don’t work on this. So I’m confident that that will yield results in time to come.

Tarang Agrawal — Old Bridge Capital — Analyst

Thanks a lot.

Operator

The next question is from Saket Kapoor. Saket, please go ahead.

Saket Kapoor — Kapoor and Company — Analyst

[Foreign Speech] and thank you for this opportunity. Sir, firstly, just as you concluded to the earlier participant that — sir, I am audible to you?

Vikramjit Singh Oberoi — Managing Director & Chief Executive Officer

Yes, sir. Absolutely.

Saket Kapoor — Kapoor and Company — Analyst

Sir, as you have just answered the earlier participant that you are always in the foray to increase your count of hotels. So, sir, this being a hugely capital intensive sector and also the refurbishment and the remodeling, if I may, use for hotels and other restaurants and all requires a continuous — is a continuous process. So, how good is capital allocation in the segment that gives you this understanding that it is always correct to be — to increase your hotel count, sir.

Vikramjit Singh Oberoi — Managing Director & Chief Executive Officer

So, Saket, thank you. Actually, we are — there’s one hotel project, which was Kallol mentioned, which is in EIH project. But the other ones are through management contracts. We’re also looking at partnerships and hopefully in due course we’ll be able to talk about that as well, but growth doesn’t always require the hotel company in this case EIH to invest in the asset. Growth can take place in other ways. And probably for our industry management contracts, the model that many hotel companies follow and we are no exception to that. So, this continues to be or is a focus and I hope in time to come we will be able to share further details with you in addition to the details that Kallol has already shared today.

Saket Kapoor — Kapoor and Company — Analyst

Sir, a small point, sir, how has this industry shaped up post this pandemic part? And as people have spoken about the latent demand in our demand, sir, we have seen that in all the cases, although it is not about likewise comparison, but wherever these aspects of inherent demand or inner demand everything has plateaued out over a period of time. So how different can you take — can you compare a hotel industry with other business aspects, wherein they have returned to the main revision has happened. And herein, we are speaking of — you are seeing more signs of green shoots rather than any slackening of demand. So what gives you this understanding that for a hotel industry, which is a discretionary product, these kind of numbers would continue even in other aspects where they — where we are seeing recession — not recession exactly, but things are tapering down, sir, that is what my understanding is.

Vikramjit Singh Oberoi — Managing Director & Chief Executive Officer

Thanks, Saket. So we can only go by what we see. I mean, what we see based on even future reservations is demand continues to be strong, but there are two things that drive our results. One is, growth or demand but also equally we’d like to increase and have been increasing our market-share across hotels by location, vis-a-vis our competitive set, and our efforts will continue to get a larger share of that pie whether it is bigger or smaller, but like I said, everything that we look at today suggests the demand will continue to be strong based on information we have today. And in fact, we have no reason to believe that foreign occupancy will not come back and when it does, the benefit to EIH will be substantial because like Kallol shared in that slide on foreign occupancies. We appear to be at least based on historic data, a natural choice for foreign travelers coming into India. Well then that’s one business or on leisure.

Kallol Kundu — Chief Financial Officer

And if I may also add Vikram, I think, what needs to be also seen, Saket, since you are mentioning or you’re talking about potential if you see in general in India, what is the average room rate that one traveler pays versus what is the rate that a traveler pays in other countries, including not only in Western countries, but also in other developing economies. So if you see the differential there, then you will know, what is the potential that is there for India. We just hope that the industry has a whole place to that as we do, definitely believe ourselves and in which case the sky is the limit.

Saket Kapoor — Kapoor and Company — Analyst

Two small points sir.

Navin Agraval — Investor Relations

Saket, may I request you to join the queue.

Saket Kapoor — Kapoor and Company — Analyst

Yeah, I’ll come in the queue, sir. No, issues.

Navin Agraval — Investor Relations

Thank you.

Vikramjit Singh Oberoi — Managing Director & Chief Executive Officer

Thanks, Saket. Thank you.

Navin Agraval — Investor Relations

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

Nihal Jham — Edelweiss Financial Services Limited — Analyst

Am I audible.

Navin Agraval — Investor Relations

Yes, Nihal. Please go ahead.

Nihal Jham — Edelweiss Financial Services Limited — Analyst

My apologies for that. Congratulations on the strong performance. I had two questions, Mr. Oberoi and Mr. Kundu. First was, if I look at your month-wise performance that you’ve given in the presentation, October we are aware had the impact of Diwali, but November in terms of occupancy was similar to what it was pre-COVID. However, the December month has seen a significant improvement in the occupancy for this quarter versus pre-COVID. So what has changed specifically that has let to such a strong spurt in occupancy for December. Maybe I’ll take my next question after this one, if you’re fine.

Vikramjit Singh Oberoi — Managing Director & Chief Executive Officer

Yeah, I see that. Nihal, I cannot answer that question as I sit here and I don’t want to say anything, which is not factually correct. But I — we can certainly take this offline and happy to look at each market segment, each hotel and come back to you. But I would encourage you not only to look at our occupancies, but please also look at ARRs and RevPAR.

Nihal Jham — Edelweiss Financial Services Limited — Analyst

Absolutely. Even on the right side, I think I see that but maybe I’ll connect offline and move on to have this discussion.

Vikramjit Singh Oberoi — Managing Director & Chief Executive Officer

Happy to do that.

Nihal Jham — Edelweiss Financial Services Limited — Analyst

The second question was on the foreign tourist data that you shared. Appreciate you’re giving the disclosure. Just as an observation that as a number has stayed constant for the last few months. Well, it has seen a strong improvement from the month of April. So any specific reason or reading and given you have the visibility on business on books, are you expecting that number to significantly improve in the Jan to March quarter?

Vikramjit Singh Oberoi — Managing Director & Chief Executive Officer

So, one area — one market, which is a very — so let me actually take one step back. The US market and the UK market are the two most important markets for us in terms of foreign travel. In the US market, we’ve seen a full recovery in fact over full recovery. The UK, unfortunately, we have not seen that. We believe that may be to a large extent influenced by all the Visa-related issues, you couldn’t get e-visas, that has now been resolved. So we hope that we’ll see a recovery and this is despite the issues that sadly the UK faces with its economy. But we — time will tell, but we believe the UK will recover, because it was just very, very difficult to travel from the UK to India. And those are two most important foreign markets.

Nihal Jham — Edelweiss Financial Services Limited — Analyst

Got it. Could I take up one more question or I can come back in the queue?

Vikramjit Singh Oberoi — Managing Director & Chief Executive Officer

Please go-ahead.

Nihal Jham — Edelweiss Financial Services Limited — Analyst

Thank you so much. Just on the mix of business that you have given, corporate seems to be slightly lower versus pre-COVID, but we’ve seen an improvement in the direct booking. Have you seen a trend where the increase or there has been a shift in terms of how people are booking maybe the corporates are going via the direct route or still corporate travel is to see full recovery?

Vikramjit Singh Oberoi — Managing Director & Chief Executive Officer

I think there’s probably some overlap between direct and corporate. So I would say what you’re saying is correct. To the extent that is, I’m not entirely sure. But corporate is an important segment. We have good relationships with our corporate clients. We have an active engagement with them, and again our endeavor will be to at the right price, get a larger share of this business. I mean, I’d just add one other thing, which is important is that RFP accounts typically book on base rate. And as occupancies pick up and corporate lead time is short sometimes you have availability constraints. So, please also keep that in mind that this materialized room nights, but hotels are running very high occupancies during the week and sometimes on weekends as well depending on the location and therefore demand — corporate demand may be suppressed because of a lack of availability.

Nihal Jham — Edelweiss Financial Services Limited — Analyst

Got that. Thank you so much, sir. Wish you all the best.

Vikramjit Singh Oberoi — Managing Director & Chief Executive Officer

My pleasure. Thank you so much.

Navin Agraval — Investor Relations

Thanks, Nihal. The next question is from Vikas Ahuja. Vikas, please go-ahead.

Vikas Ahuja — Antique Stockbroking — Analyst

Yeah, hi. This is Vikas from Antique Stockbroking.

Vikramjit Singh Oberoi — Managing Director & Chief Executive Officer

Hello, Vikas.

Vikas Ahuja — Antique Stockbroking — Analyst

Sir, firstly the congratulations on getting voted as the best hotel brand. And my first question is related to this only. [Indecipherable] probably one of the best hotel brands in India and in the best why don’t we have a strong strategy on getting rooms added aggressive be through and because when I look at your competitors, they are being readied visible even getting more aggressive in adding more-and-more rooms [Indecipherable] It’s my first question and I have a follow-up also.

Vikramjit Singh Oberoi — Managing Director & Chief Executive Officer

Okay. So to answer your first question Vikas, number one, you’re correct. And number two, we are pursuing this very, very actively, like I said. So that should bear fruit in time to come and we will be able to share that with you in time to come. But this is a very important area for all of us and we’re working very hard towards that.

Vikas Ahuja — Antique Stockbroking — Analyst

Yeah. I mean just want suggestion, there is any strategy, which can be laid out to investors. So it would be very easy for us for the modeling purpose. Secondly, rates I assume this quarter will be all time high or maybe higher since GFC. So my question is regarding the pricing, how sustainable it is? Do you think the supply able catch a far fast in maybe next two-three years, to check on the rise in the rates. Also in October, November, December we have not seen rising from INR15,000 to INR16,000 to INR18,000. Do we think the INR16,000 kind of average sustainable in Q4, especially because the managers were pretty strong which can offset some slowdown, which has related to corporate bookings.

Vikramjit Singh Oberoi — Managing Director & Chief Executive Officer

So I had trouble hearing everything you are saying Vikas, but I heard most of it, and if I were to just summarize, you’re saying will be increase in rates to be sustainable in Q4 and possibly beyond that as well. I believe they will be sustainable as far as we’re concerned. And if you look at that still and we looked at that data every day, we are well-above market on our ARR vis-a-vis our comp set. And that differential all I can say with absolute certainty. I don’t have the numbers in front of me is growing even even bigger. And certainly, what I can say with confidence between pre-COVID and now it absolutely has grown. So we continue to focus on rates. We are –we believe we have a differentiated product that guests are willing to pay premium food. And they’re willing to pay a premium for the service, they can, the personalized attention and generally the upkeep of our hotels. And that allows us to demand or achieve a higher average room rate and all those aspects of service are differentiated product. It’s something we continue to focus on. The last thing we want to do is compete on price, because then there is no end to it, it’s really commoditized product. And if you’re a commoditized product your margins over a period of time get squeezed. That is not the area we want to play in. We believe we give our guests a great experience and based on that they number-one, appreciate that or value that and are willing to pay a premium for that.

Vikas Ahuja — Antique Stockbroking — Analyst

And one thing I missed, it’s regarding the supply, catching up to maybe next two, three years. I mean, historically we have seen higher prices lead to supply also coming up in next maybe you can take two years or three years as I imagine. Are we seeing that trend also coming up? And I also have a follow-up, but I’ll go back to the queue maybe have further participant —

Vikramjit Singh Oberoi — Managing Director & Chief Executive Officer

So, I’m sure, I mean, the hotel industry hasn’t seen much increase in supply recently. There was a big spurt after the boom in 2006. Hotels are long lead times for development. But I’m hoping that actually prices remain high, not only for us, but for others and that leads to further development of hotels, the more quality hotels they are, the better it is for the industry and both will also stimulate demand. So — sorry, I believe that’s a good thing.

Vikas Ahuja — Antique Stockbroking — Analyst

Thank you.

Navin Agraval — Investor Relations

Thanks, Vikas. The next question is from Sumant Kumar. Sumant, please go-ahead. Sumant, can you hear us? I guess there is some issue. Let’s take the next question from Rajiv Bharati. Rajeev, go ahead. Yeah, Rajiv.

Rajiv Bharati — DAM Capital Advisors Limited — Analyst

Yeah, sir, my first question is on Note 8 in your result sheet, which talks about some property tax maybe. Can you clarify what’s that is this? Is there any incremental number also coming through after this quarter?

Vikramjit Singh Oberoi — Managing Director & Chief Executive Officer

No. That’s the — that will be the final number. This was our property tax related to Bombay and I maybe request Kallol to explain this in detail with numbers, if we have that with us. So we can give you further information on that. But this was a one-time there was a legal case this went to the Supreme Court. And as a result of that hotels and others saw a substantial rise in property tax. And Kallol, do you want to explain that further?

Kallol Kundu — Chief Financial Officer

Yes. Rajiv, so this pertains not only to us, but to every other hotel, and many other non-hotels as well in Mumbai. As you would probably know that in 2010 the rates was — the methodology of calculation of property tax were start to be change, which was challenged by a very large range of affected parties. And this is not something that we have not disclosed before this has been there in our contingent liability, we had been depositing 50% of the increased amount that was asked from us, post the High Court decision and as per the High Court decision, and now that the Supreme Court decision has come, this was not pertaining the case, it was not pertaining to us, but since the decision came out in general, we took a prudent stand to account for it. And therefore you see these exceptional items there.

Rajiv Bharati — DAM Capital Advisors Limited — Analyst

So if you can quantify what is the total quantum so-far in the sense over the years?

Kallol Kundu — Chief Financial Officer

It’s INR19 crore is the additional amount, which is — I don’t know if it’s clear from the exceptional — the notes to exceptional accounts, but yeah, it’s INR19 crores.

Rajiv Bharati — DAM Capital Advisors Limited — Analyst

So, INR19 crores is for the for FY ’23, but what is the total?

Kallol Kundu — Chief Financial Officer

No, no, this is a cumulated one, this is not FY ’23.

Vikramjit Singh Oberoi — Managing Director & Chief Executive Officer

Exceptional items is only for the arrears.

Rajiv Bharati — DAM Capital Advisors Limited — Analyst

Secondly, in terms of your subsidiary performance. So if I simply do the C minus S, there is a de-growth in the subsidiaries. So which are the subsidiaries basically causing this on our three-year basis.

Kallol Kundu — Chief Financial Officer

You’re looking a de-growth on which parameter, Rajiv?

Rajiv Bharati — DAM Capital Advisors Limited — Analyst

If I do — I mean, actually it’s de-growth across the parameters. In terms of, let’s say, if I do consolidated sales minus standalone and compare this compared against Q3 FY ’20.

Kallol Kundu — Chief Financial Officer

Yeah. So, well, I’ll start with the PAT first. The PAT would be on account of Mashobra, where you would recall that in the last quarter there were exceptional items in terms of the judgment that we’ve received. But in terms of revenue, our subsidiaries generally Mumtaz and Mashobra have done well. It is international, which is just picking up because hotels has, they have started opening up during the course of the year. As with other chains as well. It is international, which is really which needs really to perform as good as India is.

Rajiv Bharati — DAM Capital Advisors Limited — Analyst

Safe to assume is it — bulk of it is Indonesia?

Vikramjit Singh Oberoi — Managing Director & Chief Executive Officer

Yeah. So our own properties are Indonesia and yet the two hotels in Indonesia and Mauritius is a joint venture, and also on the consolidated accounts, you’ll see the share of profits coming in from our other hotels such as Marrakech and Sahl Hasheesh.

Rajiv Bharati — DAM Capital Advisors Limited — Analyst

That’s all from my side. Thanks a lot, sir.

Kallol Kundu — Chief Financial Officer

Thank you.

Vikramjit Singh Oberoi — Managing Director & Chief Executive Officer

Thanks Rajiv.

Navin Agraval — Investor Relations

We once again try to take Sumant Kumar. Sumant, please go-ahead.

Sumant kumar — Motilal Oswal Financial Services — Analyst

Yeah, thank you so much. Hi Kallol.

Kallol Kundu — Chief Financial Officer

Hi, Sumant.

Sumant kumar — Motilal Oswal Financial Services — Analyst

Hi, Vikram.

Vikramjit Singh Oberoi — Managing Director & Chief Executive Officer

Hi, Sumant. How are you?

Sumant kumar — Motilal Oswal Financial Services — Analyst

I’m good, sir.

Vikramjit Singh Oberoi — Managing Director & Chief Executive Officer

I’m glad.

Sumant kumar — Motilal Oswal Financial Services — Analyst

So my question is regarding the corporate rate hike currently we have taken. And also the demand side of corporate we have seen a good improvement in Q3, but how you have seen in the month of, say, Jan Feb and considering some slowdown in the corporate earnings, do you think the current mix of corporate in total booking is going to sustain and also the direct booking we have seen a significantly improved in this quarter. So do you think this mix is going to sustain going forward?

Kallol Kundu — Chief Financial Officer

So, Sumant, as you know, we don’t give guidances, but you can get — I mean, there are trends that we wish to discuss that certainly.

Vikramjit Singh Oberoi — Managing Director & Chief Executive Officer

Yeah. So I’m not sure Sumant how to answer your question. I mean, the first point I’d like to just mention is that some of corporate business as occupancies fill up does trickle into direct and corporate demand is strong, at least I’m not aware of any event that is causing that to change. So I don’t know if I have given you enough information to answer your question.

Sumant kumar — Motilal Oswal Financial Services — Analyst

So any price — can you talk about the price increase in the recent month, we have taken for a corporate site or negotiation what we have done?

Kallol Kundu — Chief Financial Officer

The ones that we have done, Sumant, is roughly between — we have mentioned this before. It’s roughly between 10% to 15% that have already been contracted, but there are quite a few contracts yet to happen.

Sumant kumar — Motilal Oswal Financial Services — Analyst

But the industry is talking about dynamic price for negotiation going-forward. Few hoteliers has indicated, they are going for dynamic price negotiation. So can you talk about your side, how you think it is going to work-out going forward.

Kallol Kundu — Chief Financial Officer

So, Sumant, if you heard Mr. Vikram Oberoi, he already mentioned earlier on that the contracting happens for corporates only for the base category rooms. So the balance part of the demand, obviously, comes automatically under the dynamic pricing, because if corporates want to travel or if somebody wants to travel and the base category of rooms is not available at the contracted rate, then the next obvious thing to do is to book at the next higher category at the bar rate, which is available on different channels. So even if it’s not consciously done, it will automatically happen.

Sumant kumar — Motilal Oswal Financial Services — Analyst

And then lastly, can you talk about the mix of the — in the corporate side, the larger corporate and mid-level and the smaller level, the new upcoming new industry is going to contribute more to hotel side, because the larger corporate contribution to the hotel industry is going to reduce, the new age technology is going to contribute more, so your price negotiation is higher side.

Vikramjit Singh Oberoi — Managing Director & Chief Executive Officer

Sumant, I don’t know if it would be right for me to talk about which sectors we are looking at, because that would be information that we’d like to keep to ourselves on our where our focus is just strategically for our corporate clients and across segments. So I hope you understand that.

Sumant kumar — Motilal Oswal Financial Services — Analyst

Okay, thank you so much, sir.

Vikramjit Singh Oberoi — Managing Director & Chief Executive Officer

My pleasure. Thank you so much.

Navin Agraval — Investor Relations

Thank you, Suman. We take the next question from Saurabh Patwa, please go ahead.

Saurabh Patwa — Quest Investment Advisors — Analyst

Yeah, am I audible?

Navin Agraval — Investor Relations

Yes, Swanip. Please go-ahead.

Saurabh Patwa — Quest Investment Advisors — Analyst

Actually it is Saurabh. I don’t know why it’s showing Swarneek. But anyways —

Navin Agraval — Investor Relations

Aplogy. Saurabh, please go-ahead.

Saurabh Patwa — Quest Investment Advisors — Analyst

Sir while you have highlighted your bullishness on industry and the outlook commenced, but when we see the hotels which you announced and which are under construction or at a planning stage, what we see that in India what we’ve actually what we are working on is largely something we have been working pre-COVID also, say, like Goa, because that was something which was there or say maybe in Bandhavgarh, and what other are in Nepal or Middle East. So I just wanted your thoughts on what we seem to [Indecipherable] like hotel in upcoming luxury locations, say, like Andaman [Phonetic] or Lakshadweep given our success in Bali or maybe something in Northeast. So [Indecipherable] share some thoughts over here? And why I’m asking this is because, this question has become more pertinent for EIH given our strong balance sheet and brand, which actually suits many of these locations. Would you be able to share some thoughts here?

Vikramjit Singh Oberoi — Managing Director & Chief Executive Officer

Saurabh, I really don’t have much to say other than what I’ve already said, is that we — this is an area where there is considerable focus. And anything that you focus on and apply your attention to yields results. And we’ll let the results speak for themselves in time to come. So that’s really all I have to say for the moment. And as soon as we’re able to share that information, we absolutely will.

Saurabh Patwa — Quest Investment Advisors — Analyst

Thanks a lot.

Vikramjit Singh Oberoi — Managing Director & Chief Executive Officer

My pleasure. Thank you.

Navin Agraval — Investor Relations

Thank you, Sourav. We take the next question from KK, Mr. Krishna Kumar Srinivasan. KK, please go ahead.

Unidentified Participant — — Analyst

Yeah. Hi. Good afternoon. And that’s a great set of numbers over the year and third quarter particularly. Sir, just want to take your perspective on this G20 meetings that happened in India over the next 12, 24 months. How is hotel placed vis-a-vis the other large competitor to have a presence in this business and what kind of market shares we’ve had in the events that we has in last two, three months. If you could share some trends your expectations on this impact of G20?

Vikramjit Singh Oberoi — Managing Director & Chief Executive Officer

Could I request — it’s a very specific question. If I could request that we take that offline. And we’ll be happy to have a dialog on that with you.

Unidentified Participant — — Analyst

Fine, fine sir. Thank you very much.

Vikramjit Singh Oberoi — Managing Director & Chief Executive Officer

Thank you so much.

Navin Agraval — Investor Relations

KK I’ll coordinate a one-on-one call with [Indecipherable]

Unidentified Participant — — Analyst

Thank you

Navin Agraval — Investor Relations

Thanks, KK. We take the next question from Jinesh Joshi. Jinesh, please go-ahead.

Jinesh Joshi — Prabhudas Lilladher — Analyst

Am I audible now.

Navin Agraval — Investor Relations

Yes, Jinesh, please go-ahead.

Jinesh Joshi — Prabhudas Lilladher — Analyst

Hi, sir. Thanks for the opportunity. Yeah, my question is on foreign travel, although this was addressed before but I just want to kind of take it forward. In response to the foreign travel recovery you mentioned that US has seen a full recovery, but in UK because of some visa issues, the recovery is still not back and e-visas are now available. So is there any other roadblock apart from this? That is question one. And secondly, if I break down the foreign travel recovery in business and leisure, where are we currently vis-a-vis pre-COVID levels and how long will it take for the foreign travel to be back to the pre-pandemic levels? So, yeah, this is my first question.

Vikramjit Singh Oberoi — Managing Director & Chief Executive Officer

So, Jinesh, I’m trying to remember all your questions, sorry. Your first question was on the UK. And I’m not sure, first of all, my assumption is visas played an issue. What I can say with absolute certainty is that we saw a sharp decline from pre-COVID levels from the UK. What I’m assuming is that may have been a result of the difficulty to get visas. The other point I mentioned is that the UK economy is going through troubled waters and you can see this vis-a-vis its growth compared to other European or EU countries. Now whether that’s playing a role or not, I don’t know in suppressing travel to countries like India, whether it’s for work or for leisure. But I think the UK will continue to face economic concerns is at least my understanding based on what I read. So that’s as far as the UK goes. In terms of recovery business versus leisure, I don’t have that information present with me right now. And I don’t want to make a statement which is in any way incorrect. Your third question was where do you see a recovery in foreign travel to pre-COVID levels. And my response to that will be, I don’t see any reason why it will not recover. I think we need to look at two things. One is not only the percentage, but also the actual numbers. So if the total volume of business goes up and the growth of foreign business is disproportionately lower, obviously the percentage comes down. So I think we need to look at both actual and percentages to really understand what is happening with foreign travel. But at least from my point of view, and this is personal to me, I believe our foreign travel will continue to recover. And we’ll see an upward trend in room nights generated from foreign travel in time to come. That’s my personal point of view.

Jinesh Joshi — Prabhudas Lilladher — Analyst

Sure, sir. Would you like to put a timeline to this as to when the recovery will be fully backed. That is the only last question which I have.

Vikramjit Singh Oberoi — Managing Director & Chief Executive Officer

And I’m not saying this for EIH. I would say that by typically demand from overseas visitors is strongest in the October to March period. And I would expect that to be the case this coming October leading on to March as well. So that’s how at least I see it.

Jinesh Joshi — Prabhudas Lilladher — Analyst

Sure sir, thank you so much.

Vikramjit Singh Oberoi — Managing Director & Chief Executive Officer

Thank you very much.

Navin Agraval — Investor Relations

Thanks, Jinesh. The next question is from Rajiv Gala. Rajiv, before we take your question, request the participants to keep their questions short and limit themselves to two questions, we’re just running out of time. Thanks. Rajiv, go ahead please. Rajiv, please unmute yourself and go ahead.

Rajiv Gala — JM Financial — Analyst

Compared to other players Q4 is usually stronger for EIH. Is it because of foreign tourist? hello?

Vikramjit Singh Oberoi — Managing Director & Chief Executive Officer

Yeah. Is that the question, Rajiv? Is it because of foreign tourists?

Rajiv Gala — JM Financial — Analyst

Yeah. Got it.

Vikramjit Singh Oberoi — Managing Director & Chief Executive Officer

Sure, Rajiv. Rajiv, I’m not sure what the numbers are for others. I can’t comment on whether we’re stronger or they are strong as far as foreign travel goes. I know what our numbers are and closure those percentages with you on the presentation. So that would be my first response. But really going beyond that, it’s really a function of demand and supply, and we’ve seen strong demand for our hotels across locations and as a result of that, we’ve been able to drive price. So that’s what’s led to the results for Q3 that you’re seeing.

Navin Agraval — Investor Relations

Thanks, Rajiv. Vikram, we have a couple of questions on the Q&A board. If you permit me, I will take them.

Vikramjit Singh Oberoi — Managing Director & Chief Executive Officer

Sure.

Navin Agraval — Investor Relations

Manoj Shroff. How has the foreign room nights increasing in Q4 versus Q3? And is it fair to assume better Q4 RevPAR versus Q3 and can we maintain cost structure of Q3?

Kallol Kundu — Chief Financial Officer

Well, cost structures are uniform. So whatever had to be factored in has been factored in. But, we won’t like to make a forward-looking statement on Q4 foreign arrivals.

Navin Agraval — Investor Relations

Another one from [Indecipherable] What according to your assessment? Is the ballpark expense in percent of incorporating green practices in operations apartment from green structures at EIH?

Kallol Kundu — Chief Financial Officer

Maybe. That’s a complicated question to answer.

Navin Agraval — Investor Relations

Too many questions in one question.

Vikramjit Singh Oberoi — Managing Director & Chief Executive Officer

Maybe just take the solar. You shared that our prices have come down per unit from INR9 to INR5 or INR10 to INR5.

Kallol Kundu — Chief Financial Officer

INR10.9 to INR5.9. But really speaking, the initiatives are being planned out as we speak and we have a whole year in front of us, you’ll find a lot of that being reported in the BRSR, which becomes mandatory from April. So, I think to answer that in a short call will be very, very difficult.

Navin Agraval — Investor Relations

We have a follow-up question from Tarang Agarwal from Old Bridge. Tarang, please go ahead.

Tarang Agrawal — Old Bridge Capital — Analyst

Hi, thanks again. A couple of follow-ups, one, if I go through Slide 13 of the presentation, which talks about occupancy and ARR performance, this is only for the domestic business, right? This is not for the international business. Correct?

Kallol Kundu — Chief Financial Officer

Yes. This is domestic, but includes managed hotels as well.

Tarang Agrawal — Old Bridge Capital — Analyst

Okay. Got it. The second is if I look at the leisure villas, the occupancy is lower versus it’s peer sets. So is it because it’s more index to foreign travel than other class of hotels?

Kallol Kundu — Chief Financial Officer

It’s not, yeah, the occupancy is up from 58% in quarter three of FY ’20 to 62% in quarter three FY ’23.

Tarang Agrawal — Old Bridge Capital — Analyst

Correct. But it’s still significantly lower than a Metro or a Trident Metro or a Trident Leisure, right?

Kallol Kundu — Chief Financial Officer

Okay, so?

Tarang Agrawal — Old Bridge Capital — Analyst

So is it because you get a lot more foreign traveler visiting the villas or is there some other reason to it?

Vikramjit Singh Oberoi — Managing Director & Chief Executive Officer

So this I think when you look at data for a number of hotels, it may not give you a true picture. So, this includes the Oberoi Amarvilas, which is just over 100 keys. So it’s the largest of Oberoi leisure hotels. And Agra is a destination, which has a very, very high occupancy on travel. And Kallol in his presentation mentioned Agra as one location where there was a decline in RevPAR, if you remember. If I remember correctly, it’s about 7%. And Amarvilas is extremely dependent on foreign travel. In pre-COVID, this would be, if my memory serves me correctly, [Technical Issues] 80% of total arrivals at the hotel. So I wouldn’t just look at that figure in isolation. I think you need to look at it and factor in Amarvilas, which is very dependent on foreign travel. Certainly, I think I wish more of us went to places like Agra, we would benefit from that, but it’s not a destination of choice for people from India, Agra. [Technical Issues] good connectivity with a very good road from Delhi now.

Tarang Agrawal — Old Bridge Capital — Analyst

Okay, thanks.

Vikramjit Singh Oberoi — Managing Director & Chief Executive Officer

My pleasure.

Navin Agraval — Investor Relations

Thanks, Tarang. We have David just not to take the last question. It’s from the line of Hari. Hari, please go-ahead.

Unidentified Participant — — Analyst

Yes, sir, good afternoon, sir, like, two questions. Does the management see any gaps to be the both in the domestic and international luxury leisure circuits. Can you please throw some light, sir?

Vikramjit Singh Oberoi — Managing Director & Chief Executive Officer

I mean, I think Banaras is a great leisure destination. And today we don’t have a hotel present in Banaras. But I think this — I mean, I think our country has so many great locations and unspoilt locations that would be very, very appealing to leisure travelers both domestic and international. In terms of Oberoi Hotels and Trident Hotels there also locations where we should be present and we’re working on those as well. And these are city locations. So I think there’s a lot of work to be done both in city and in leisure locations both for Oberoi and Trident. And rather than — and we view that as an opportunity going forward.

Unidentified Participant — — Analyst

Thank you sir. And the last question is regarding this Mandarin Oriental Alliance. How is it contributing towards that. Any quantifiable benefits we’re getting from the alliance, sir?

Vikramjit Singh Oberoi — Managing Director & Chief Executive Officer

Actually there’s a lot happening in terms of exchange of ideas and best practices promotions, etc. It’s very hard to exactly quantify the number of room nights because guests pick various channels to book and maybe Mandarin Oriental guests Oberoi guests going stay at Mandarin Oriental, but they may not come true the — by referring it to Mandarin Oriental. And even if you go to our website what it does is it takes you to it brings you back to the Oberoi website and if you make a reservation through that you actually coming through the Oberoi system. You’re not going to Mandarin and making a reservation at Mandarin. But I think if I were to answer that question another way Mandarin hotels has a presence in our key locations in Europe and North-America. In locations that are important from an Oberoi guest perspective. And the exposure that Oberoi gets as a result of this alliance will help drive business to our hotels. They may book through various channels. And if this is leisure business, leisure, because of the complexities of India, you go to multiple destinations, you need our airline domestic airlines flights, you need guides. So it’s much easier for somebody to go or a guest to go to their travel agent who can book everything for them rather than coming directly to multiple hotels in multiple locations plus TransFirst plus transfers. So that’s just the nature of business when you’re going to a country where visiting many-many locations. Average rent per visit is approximately 10 days for international travel actually from the US, it’s slightly longer from the UK, 10 days for leisure and with multiple locations.

Unidentified Participant — — Analyst

Thank you very much, sir.

Vikramjit Singh Oberoi — Managing Director & Chief Executive Officer

My pleasure.

Unidentified Speaker —

Thank you very much. That was the last question. And before I hand over the call back to Vikram like to congratulate Vikram, Kallol and their team once again being awarded the Best Brand. Over to you Vikram.

Vikramjit Singh Oberoi — Managing Director & Chief Executive Officer

Thank you so much. And Navin, actually, it’s — I really genuinely say this that credit doesn’t come to me, credit goes to all our colleagues who look after our guests every day when they come to our hotel, who follow the values of our organization that articulated in our dharma. They are really the true heroes. Our job is to give them the support they need and help them to flourish. So if anybody deserves credit, they do more than any one of us at corporate office. They are true heroes. And we thank them for doing this day in and day out with our guests and also supporting each other. We, it’s very important that we have people who enjoy what they do, enjoy what you do, you it well. So the culture we try and create within the organization and at our hotels is one where we hope people really enjoy what they’re doing and therefore make a meaningful difference.

Navin Agraval — Investor Relations

Thank you very much Vikram. Kallol, wanted to add something?

Kallol Kundu — Chief Financial Officer

No, I just wanted to add that finally, it’s the questions that we used to hear in the earlier analyst calls of whether rates are going to go up. So we hope we’ve been able to answer some of those this time and obviously going forward. And as I said that the green — this is only green shoots, because if you look at the number of tourist arrivals into India, that is far less than other countries. So there’s a lot of potential there. The rates that is currently that prevails in India is way less than what it is in other countries. So we do have reason for optimism to believe that India as a country should move much, much ahead in the times to come. Thank you.

Vikramjit Singh Oberoi — Managing Director & Chief Executive Officer

And maybe I’ll just add one thing to what Kallol said, is hotels in India are actually relative to whether it’s the developing world whether it’s the Middle East or whether it’s Europe are significantly cheaper to get quality of hotel that you get in India in the luxury segment is at a fraction of the cost of what it would be elsewhere. And if you go to a city like London or New York and I’m not saying where at London and New York, and you stay at a leading luxury hotel there, you’ll be paying upwards of in New York upwards of $1,200 to $1,400 a night. And in London, you’ll be paying upwards of GBP1,200 to GBP1,400 a night. So we are really, really good value and I hope all of us, whether it’s us or it’s our competitors give our guests an incredible experience that is hard to replicate in other markets. So I think the significant upside on ARR and I hope we will benefit from that.

Navin Agraval — Investor Relations

Thank you very much, Vikram. It’s always a pleasure hosting you and Kallol. And we look forward to hosting you for your future interactions with investors and institutions. Thank you very much, ladies and gentlemen. And have a lovely day.

Vikramjit Singh Oberoi — Managing Director & Chief Executive Officer

Thank you so much. Thanks, Navin.

Navin Agraval — Investor Relations

My pleasure. Bye bye.

Vikramjit Singh Oberoi — Managing Director & Chief Executive Officer

Thanks. Thanks. Thanks, Naresh. Bye-bye.