Indian Hotels Company Ltd (NSE: INDHOTEL) Q4 2025 Earnings Call dated May. 05, 2025
Corporate Participants:
Puneet Chhatwal — Managing Director and Chief Executive Officer
Ankur Dalwani — Executive Vice President & Chief Financial Officer
Analysts:
Karan Khanna — Analyst
Binay Singh — Analyst
Sumant Kumar — Analyst
Prateek Kumar — Analyst
Sameet Sinha — Analyst
Achal Kumar — Analyst
Abhay Khaitan — Analyst
Prashant Biyani — Analyst
Aliasgar Shakir — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to the Indian Hotels Company Limited Earnings Conference Call for the Quarter and Year-Ended 31st March 2025. On the call, we have with us Mr. Puneet Chhatwal, Managing Director and CEO, IHCL; and Mr. Ankur Dalwani, EVP and CFO, IHCL. As a reminder, all participant lines will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. [Operator Instructions] Please note that this conference is being recorded.
I now hand the conference over to Mr. Puneet Chhatwal. Thank you, and over to you, Mr. Chhatwal.
Puneet Chhatwal — Managing Director and Chief Executive Officer
Good evening, everyone, and thank you for joining our global conference call for Q4 and FY 2024-’25. We are pleased to inform you that we have continued our record performance for the 12th consecutive quarter on the back of continued growth momentum and key strategic initiatives yielding in positive results. I would now like to outline the 10 key highlights of ’24, ’25. Number-one, strong industry fundamentals. Driven by strong domestic demand, limited supply addition and favorable demographics, the hospitality sector continues to be in an upcycle. In FY ’24, ’25, demand represented by room nights sold grew 6% as against supply of room nights available, growing only under 3% versus last year for the industry.
Strong domestic business travel demand, coupled with mega events like Mahakum, international music concerts like Coldplay and a strong wedding season were the key demand drivers this year. This trend, ladies and gentlemen, is expected to sustain in the mid to-long-term with India’s continuing to be the fastest-growing large economy and the rise in disposable incomes with the addition of new tourist destinations and evolving traveler behaviors. I come with that to point number two, which is strong financial performance. On a consolidated basis, IHCL delivered record performance in FY ’25 with 23% revenue growth and 140 basis-points margin expansion over the previous financial year, despite consolidating thoughts as a subsidiary, I repeat despite consolidating as a subsidiary, which has relatively lower margins than the hotel segment.
Our consolidated revenue stood at INR8,565 crores and our EBITDA margin expanded to 35% in FY ’25. Our reported profit-after-tax stood at INR1,908 crores. This number, however, includes an exceptional gain of INR305 crores. Excluding the same, the normalized PAT has grown by 27% to INR1,603 crores. We promised and gave a guidance of double-digit revenue growth at the beginning of the year and we are happy to share that we comfortably achieved the same despite Q1 being a muted quarter as we will all recall due to excessive heat and the code of conduct. IFCL’s hotel segment showcased 13% revenue growth and EBITDA margin expansion of 220 basis-points to 35.9% in FY ’25.
During Q4, the hotel segment continued its strong performance with revenue growing by 13% to INR2,206 crores and margin expanding to 38.5% by 230 basis-points. Our standalone performance in FY ’25 was also the best-ever with 12% growth in revenue to INR5,145 crores and EBITDA margin expansion by 260 basis-points to 43.9% 3.9%. Standalone PAT grew 29% to INR1,413 crores, taking PAT margin to 27.5%. Number three, double-digit RevPAR growth. As we all know, RevPAR is one of the key metrics for our sector and IHCL delivered 16% consolidated RevPAR growth in Q4 and 12% for the full-year on a domestic like-for-like basis on the back of demand continuing to outpace supply and our asset management initiatives. This strong performance helped IHCL command a RevPAR premium of 73% at the enterprise-level for the year over the Indian industry, thus maintaining the premium positioning in each of the segments we operate in.
Our international consolidated portfolio reported double-digit revenue growth, driven by strong performance at the peer in New York. The US subsidiary turned EBITDA-positive on the back of strong management interventions over the last 18 months. Number four, our expansion momentum continues. We have set a new growth benchmark with 74 signings and 26 openings in FY ’24-’25, taking our portfolio to 381 hotels with 247 hotels operational as on-date. Over 95%, I repeat, 95% of these signings are capital-light, resulting in an industry-leading pipeline of 134 hotels as on-date. This was enabled by IHCL’s strong brand presence across market segments, coupled with sustained demand buoyancy.
In alignment with our strategic roadmap, Accelerate 2030, a significant share of the signings were in Gateway and ginger brands like we had guided and also reflective of the fast-growing upscale and mid-scale segments in India. This year, we continued to build scale in each of the brands with Ginger crossing a 100 hotel portfolio and Vivantha reaching the 50-plus hotel mark. That is due to our focus in-building critical mass in each of our brands that we have either reimagined or launched new. Number five, capital-light growth, a key ROCE driver. On the back of our capital-light growth strategy, our management fees in FY ’25 was INR562 crores, an increase of 20% over the same-period last year. This was driven by 11% net unit growth in managed hotel rooms in increase in RevPAR, technical fees and new fee streams such as brand fee.
Number six, new businesses delivering consistent growth of 40%. Our new businesses vertical comprising ginger, cumin, and trails and now Tree of Life delivered a 40% growth in FY ’25, resulting in a consolidated revenue of INR602 crores. New business continues to be margin-accretive with a consolidated margin of 37% as against the overall consolidated margin of 35% for the company. Cuminized ginger or as we Call-IT, the humanization of ginger continues to be the mainstream of the new business, contributing about 95% of the new business revenue. In the first full-year of operations, the flagship Ginger Hotel at Mumbai Airport closed the year with a revenue of INR97 crores and is expected to comfortably cross the milestone of INR100 plus crores in this financial year.
Qmin, on the other hand has expanded to 72 outlets and in addition to serving as the F&B brand for Ginger Hotels has also established a presence in West Side stores in Mumbai and Bengaluru through a shop-in-shop format. Furthermore, Qumin has launched operations at Chennai, Kolkata and Bengaluru airports in partnership with TFS. Trails reached a milestone of 300 plus in portfolio with second consecutive year of 100 plus villas signed during the year.
Number seven, our continuous focus on asset management and investing for future. We remain committed to investing in our assets and building our capabilities for the future, thus strengthening our competitive advantages. IHCL in FY ’24-’25 spent over INR1,000 crores towards CapEx, out of which half was used for renovations, routine maintenance and very importantly, digital initiatives, while the rest half was used towards greenfield projects. Number eight, Tata new. Our Tata new loyalty program achieved milestone of 10 million members with Points earning contribution, which is members booking through direct channels rising by 43% year-on-year to INR2,200 plus crores. The unwavering loyalty of our customers is visible in our increasing enterprise NPS scores, which stood at 74 for 24/25, up from 73 last year.
Number 9, under our ESG plus framework, Patthya, we marked a significant milestone in FY ’24-’25 with 51 hotels drawing power from clean-energy sources, including 13 operating on 100% renewable energy through a mix of on-site installations, off-site sourcing and strategic power purchase agreements. IHCL standalone, which represents two-third of hotel consolidated revenue now uses 54% energy from renewable sources. Continuing our journey of eliminating single-use plastic, IHCL has installed 64 bottling plants and achieved 50% recycling of water used.
Finally, number 10, we come to the outlook, which we feel is robust for FY ’26 and beyond, and we remain confident of delivering double-digit revenue growth. With strong domestic demand, significant potential in foreign arrivals or a recovery from a pre-COVID phase of foreign arrivals and over 70 plus auspicious wedding dates spread evenly throughout the year, we remain confident of delivering double-digit revenue growth in FY ’25, ’26. We have begun the new financial year-on a strong note with April 2025 consolidated revenue growing by approximately 17% over April 2024 and strong business on books for Q1. IHCL has liquidity of INR3,000 crores, which will not only help us tackle headwinds, if any. Yeah, I repeat tackle wins, any kind of headwinds, if any, but will also give us an advantage for any consolidation opportunities that may arise in due course.
In summary, we expect to deliver strong growth with sustained margins and continued portfolio growth with a target of opening 30-plus hotels in FY ’26, three of which will be on our balance sheet. We are well on-track to achieve our committed guidance of double-digit growth. Our focus also remains on scaling our new businesses, evolving our brand scale and strengthening our competitive advantage with prudent capital allocation and strategic opportunities. Reflective of the company’s sustained financial performance, our dividend of 20% of consolidated PAT amounting to INR2.25 per share is proposed subject to shareholders’ approval.
Finally, thank you so much for your attention and we will now open the floor for questions.
Questions and Answers:
Operator
Thank you very much, sir. We will now begin with a question-and-answer session. [Operator Instructions] Thank you. The first question is from the line of Karan Khanna from AMBIT Capital. Please go-ahead.
Karan Khanna
Good evening, everyone, and thank you for taking my question and congratulations to the team on a great ending to an exceptional year and also for the growth sustaining in the current quarter as well. My first question is regarding greenfield hotel openings. Puneet and Ankur, you have in the past spoken about how current economic rates are still not viable for greenfield asset developments. But if I look at recent industry reports, more than 50% of hotel signings in CY ’24 were in the form of greenfields. How much headroom do you think still exists before we start seeing a lot more conversions in the form of greenfield additions or rather at what rates do you think these projects should start looking more viable?
Ankur Dalwani
Yeah. Hi, Karan. Thanks for the question. I think what we have referred in the past is actually with reference to buying out land from scratch and actually taking approvals and going through the whole process of setting up a greenfield. Is like a pure greenfield asset, which I think when we talked about that in the Capital Market Day, we had said that at that time, the rates were still not sort of will give you an attractive IRR.
I think that to that direction, our thesis has not changed because if you see whatever been has announced is either a combination of the assets where we are — where, for example, in our case, the land is coming to us in the form of lease at attractive rates, making the proposition viable or if it is an existing parcel of land, which has been put to use like we did in the case of Ginger Mumbai Airport. So I think as far as if you step-back and look at the larger picture, I think the — even if you look at the first-quarter this — for this financial year, it is looking strong, both as far as ARR and RevPARs are concerned. It’s a good beginning. Of course, we have the benefit of a low-base of last year. So as such, there doesn’t seem to be any direction to say that ARRs have kind of peaked. I think there is good momentum which shows up on the portfolio.
Puneet Chhatwal
Yeah I would just like to add, see, there is no one-size fits-all the greenfield opportunities in Tier-2, Tier-3 cities or new markets are quite interesting. For example, we are going to open this year greenfield in Ektanagar, Avivantha and a ginger, both together. Now that opportunity is very interesting because of so many visitors going to Statue of Unity every day, but also how that is going to evolve based on the entire infrastructure development program that the government has put in-place and the importance that the government has given there.
From our point-of-view that land came at a very compelling proposition and to build straightforward greenfield assets was at a very, you know kind of a reasonable cost. So we expect very quick payback of projects like this, which will definitely not exceed seven years. If we are lucky, it could be in four to five years’ time. And such projects, we will always pursue in the ethos of Tata Group in terms of both nation building, but they are also very important in deploying our own capital and will keep increasing our return on capital employed.
Ankur Dalwani
This is helpful. Thanks. My second question in Slide 26 of the investor presentation, we can see that share of bookings from your own website has increased by 100 bps to 15% in FY ’25. Could you highlight the kind of savings that accrue to you from change in this mix? And what kind of aspiration or plans that you have to increase the share going ahead? And if you can also quantify what kind of cost efficiencies do you expect accruing because of that?
Puneet Chhatwal
There you know this is a — this number is a little subdued for last year. This number will go up because we have only relaunched the new website of the Taj brand and we have also done that with Ama. But almost every six-weeks, we will have best-in-class websites getting launched and we hope to get more-and-more traffic with the combination of the new digital initiatives as well as start our new initiatives to get more traffic through our website and each percentage increase or each room night that we don’t have it going through there saves us anything around INR1,000 to INR1,500 rupees based on the total mix. But as the growth is coming more in the upscale and mid-scale brands, so you can safely assume around INR700, INR800 rupees per booking that is channeled directly through our website.
Ankur Dalwani
Yes.
Karan Khanna
Yeah. And then lastly on, if you can update how the construction is expected to progress in FY ’26? And as a follow-up, have you elaborated on the structure for this asset? Will it be entirely on IHCL balance sheet or will you be looking to nurturing some of your existing partnerships such as with GIC or with an external partner for this asset?
Ankur Dalwani
Okay. So I think the second part is easier to take. Right now, it is being planned to take this in our subsidiary company. So not on standalone, but on a consol basis, it will be 100% owned. As of now, that’s the plan. The GIC partnership, as you knew, was a partnership which actually has got over, but we continue to be in dialogue with them if there is anything interesting which we can do together. But for now, the plan is to do it on our balance sheet. And the second point on…
Puneet Chhatwal
This will incur.
Ankur Dalwani
And the other thing on this one is that one positive development which is actually likely to come up is that as per tonstand and, the road from going to the ceiling is likely to get approved, which would actually get the connectivity to this — these hotels much, much superior than what it is today and that’s obviously something which we are also tracking closely.
In terms of approvals, I think we have made good progress. In the next few weeks, we expect to hear some good news in terms of the CRZ approval, which is the next milestone as far as this asset is concerned. And once that is in-place, then I think it’s then awaiting one final nod on the height because we already have a height approval till 145 meters and we have now applied to take it to 165. Once that comes through, I think we are in a position to start construction. So I think somewhere latter part of this year, construction can actually start towards end-of-the year.
Karan Khanna
Great. That’s helpful. I’ll come back-in the queue for any follow-ups.
Puneet Chhatwal
Anyone else who might want to ask the same question, you know when we discussed this two, three years ago, we said we don’t have to build it on our own. Yes. With the cash that we have generated and the reserves that we have and the expected cash that we will have, it does not make sense to our partner, but that’s a very luxury position to have. If need be, we can partner both from within Tata Group or outside Tata Group like with the GIC or anybody else or with another developer or with Tata projects, everything — we have all the options in our hand, but as things stand today, given the change in our position from being net-debt free and generating so much cash, it makes absolute sense today to do this on our own.
Ankur Dalwani
Yeah. We may derisk the project like Mr Chatwal is saying, we may derisk it by getting a turnkey contractor. But as far as ownership goes, it probably makes sense to at least start having it under our belt and then we’ll see how it goes.
Karan Khanna
Thank you, sir.
Operator
We’ll take the next question from the line of Binay from Morgan Stanley. Please go-ahead.
Binay Singh
Hi, team. Congratulations on another very strong quarter. My first question is how should we think about capex next year and what are the key areas that you would be spending it on? Thank you.
Ankur Dalwani
So we have guided in the press release that we should be we firstly, in the context of the capex, this year we spent close to about INR1,100 crores. This is on a consolidated basis, INR1,074 crores a number, which is kind of evenly split between greenfields and renovation and routine and digital. The greenfield also include, by the way, the money we put out for securing the FSI for band stand. So I think that was a large portion of that capex. Next year, we have — I mean, in this current year, we have a few projects which are going to get to completion, eight to two projects. We also have Banaras coming — Banaras is adding brownfield expansion of 100 keys that will also get done this year, which is being done through our subsidiary. And a few other smaller projects, which includes — it’s small in terms of outlayer also going to incur capex basis. So overall, I think we have guided towards INR1,200 crores plus kind of capex for the year and we feel comfortable about that.
Given that we are also wanting to sort of scale-up assets on the balance sheet as quickly as possible. Of course, there’s a physical constraint on how much we can build. And so out-of-the INR1,200 odd crores, we would think almost there’s also large renovations planned in some of our assets, including Taj Palace in Delhi, Ford and Goa, St. James in UK, Taj Calcutta, so Taj Bengal. So essentially, if you put all together, I would think — we would think about 60% to 65% of the capex would get spent on renovations and digital investments and rest would really be going towards greenfield assets. Of course, this number will evolve because it’s also a function of approvals, particularly on the greenfield side.
Binay Singh
Yeah, right. And the second question is the April number that you shared about 17% growth. Could you remind us that is it — how much of it is due to base? Because I remember May was very weak last year. So was April also very weak last year that you are seeing the 17% on that? If any sort of a breakup you could give on what would be like a normalized run-rate and what is it because the base is very low or any thoughts around that?
Puneet Chhatwal
Binay, since the last several years we speak, we keep talking about this base and growth and it’s just the demand is outpacing supply. There are more wedding dates, so April, May will be good. Of course, the base, if we look at Q1 was last year exceptionally the weakest quarter. So the way to look at it this year would be Q1 plus Q2 combined. The same thing as we said last year, please look at Q2 and Q1 together. So because we had a low-base in Q1, the sector should definitely do a minimum of double-digit growth. The question is at what level, 12, ’14, ’15, ’17, ’19, as things stand today, year-to-date, which means four days of May and 30 days of April, we are definitely at 17 plus, but that’s a very-high number. So if it stays like this, we are very happy, but things don’t stay like that always, as you know. So I think anything which is north of 13% 14% is a very healthy number because of the business on the books. And in the current environment, a lot of people are not planning that far to book. So given what happened in the North. So there will be a bit of this, which will create a pent-up demand again for Q2 if there were some misses in Q1. But the way it has started, any of that possible miss would be more than compensated with the performance that we have seen in the first — or we’ll see in the first 40, 45 days of this financial year.
Binay Singh
Great team. No, then that is helpful. Thank you.
Ankur Dalwani
I mean also to add, the growth on last year April was not that subdued. I mean really the quarter became subdued as we got into May and June and April actually was reasonably — it wasn’t as good as this April, but was a reasonably high-single-digit or early double-digit kind of a number, if I recall correctly.
Binay Singh
And just squeezing one more question on the foreign tourist arrival, pre-pandemic, this used to be always trending up, was a good profit margin business also. I do understand in the near-term, we have a little bit of broader uncertainty, so it could impact tourists adversely. But is there anything that the industry or the government is doing collectively to take this number much higher? In fact, the slide that you talk about the in India are lower than some of the standalone cities globally. So anything that you see in the longer run that the government and the industry is collectively doing to really push this number up?
Puneet Chhatwal
There are two-ways to look at this technically now in the last few months, the number of arrivals has gone up, but just the terminology FTA is not appropriate. So that’s why when I was giving my 10 points, I called it foreign arrivals and I missed that P, I took out that team. Because as India gains more-and-more relevance and importance as being the 5th-largest economy and progressing towards third-largest, there’s more-and-more business interest that is getting generated from outside of India and more-and-more people after G20 are still traveling. It’s not that G20 happened once and nobody came back. So people are coming. And the foreign companies that had business established in India, give you an example of Siemens or Bosch or whatever these are German groups or buyer, they’re all growing in size and more-and-more of their people from their corporate offices from Germany are coming in.
So this is a trend you will see in auto sector, you will see that in the global capability. Global capabilities and capability centers that are being built. So that’s one-way to look at it that part is happening. But when it comes to the tourism part. We have not seen us going back to what it used to be pre-COVID. What we have done is we are committed to Indian Association of Tour Operators at their annual business conference last year and we have put in as Indian hotels are committed to be spent over three years in helping promote India outside. We have done that at the WTM in London. Most recently, last week at the ATM in Dubai and in March at the ITB in Berlin by hosting the India Day.
We’ll keep doing these activities. We have made also for travel agents many other terms favorable by, you know, changing their cancellation policy by including breakfast in the rate component, etc., etc. So that our own community is a bit more incentivized to bring in the business. And because we are doing it, I’m sure others will also follow. At the same time through the various other organization like CII or HAI or FHRAI or Faith, which is the Apex body and individual associations, everybody is doing their bit to lobby with the government to get some international marketing budget and so that we can promote this wonderful culturally diverse destination to build-on the soft power of Brand India.
Binay Singh
Okay, sir.
Operator
We’ll take the next question from the line of Sumant Kumar from Motilal Oswal. Please go-ahead.
Sumant Kumar
Yeah, hi, sir. So I have seen this, yeah, margin in this quarter is lower. So what are the key reason for that?
Ankur Dalwani
So Sumant, I think we put a note also explaining that basically, the new contract which they have signed in some of the — some of the facilities, the way they are accounting for levy exchange as per the new contract, earlier it was not a P&L item. Now the levy flows through the revenue and also through the cost, essentially that impacts the margin per se because firstly, it gets increases your revenue without increasing — changing your EBITDA. Also in some of the facilities, there is a levy on levy. Essentially, if you part of your revenue you have to pay levy on that as well. So I think both of these factors actually have impacted the margin. And if it was not for that, it’s — for example, this quarter, the margin would have been actually lower by only 0.5%. That also is explained because there were some one-offs in their P&L last year. And if we were to knock-off that one-off, which we haven’t talked about it here, but it would actually been a positive quarter for them. Overall, if you look at how we are looking at their numbers over the next year FY ’26, we expect that this — because of this, there could be a 1% impact on the margin, but this will also help in growth in the revenues because this levy now gets added to the revenue itself. So if they were doing 13% 14%, they could do an additional 3% to 5% because of the levy now going through the P&L.
Sumant Kumar
So considering current scenario in international market, do you think the US and UK business is likely to see a challenging year for these two subsidiaries, FY ’26?
Puneet Chhatwal
No, on the contrary, we feel that — see, we have only two properties in US. San Francisco went through two very bad financial or two, 2.5 very bad years. But since January, San Francisco is slowly coming back as it used to be. And on the occupancy, it has reached the level where it was and on the rates, it’s increasing by leaps and bounds. And we do believe that San Francisco will be a big positive surprise this year. The April was extraordinarily good for San Francisco but that is that changes in that city-based on the big events that they get. In New York our size of the hotels is not that big. This is — these two hotels put together are like close to 300 rooms. But our efforts in New York, as I said, are beginning to pay-off. And for the first time, Pier was EBITDA-positive and we think this journey will continue in a positive way also this year.
Sumant Kumar
Yeah. Okay. Okay. Yeah. So sir, in April month, you were talking about 17% growth.
Puneet Chhatwal
Yes.
Sumant Kumar
And which city has driven the growth?
Ankur Dalwani
It’s across-the-board.
Puneet Chhatwal
Across-the-board.
Ankur Dalwani
Domestic and international have — actually even international has done well, you know, mid to-high teens across-the-board. So I don’t think it’s a specific city which has sort of given the growth. I mean, the big cities, the metro cities continue to fire, which was expected and which is Bombay, Delhi, Bangalore and even markets like Hyderabad, Rajasthan have done quite well.
Puneet Chhatwal
And the first four days of May have also been very good because you know the commercial capital Mumbai had the waves event and Delhi had some heads of state’s visit and fortunately for us, one of them we hosted.
Sumant Kumar
Yes. And majorly ARR driven?
Puneet Chhatwal
Very strong ARR driven.
Sumant Kumar
Okay. Thank you so much. Thank you.
Operator
Thank you. We’ll take the next question from the line of Prateek Kumar from Jefferies. Please go-ahead.
Prateek Kumar
Yeah, good evening, sir. Congrats for great results. My first question is on city-wise RevPAR growth. So like we have stopped giving that data, but like in terms of tourist cities versus business cities. So overall 15% RevPAR growth in the quarter, like how does it like sort of show-up in different cities?
Puneet Chhatwal
You know, Prateek, most of the cities are very strong, the only place which is a little bit of under pressure or flat is go up. But it’s still having the — it’s still having the highest rates or the highest RevPAR in the country. So at least for us. And if I was to take the growth in Q4 in Mumbai was 14%, daily NCR was 27%, Bengaluru was 28%, Chennai was 12%, Rajasthan was also 12%, Hyderabad 14%, Kolkata, 26%. But some of these things and also Kerala 16, it also depends what is the base you are coming from.
So in Goa, the base was 18,000 for us. Now Rajasthan was 23,800. Hyderabad was also 98, but Delhi was only 11,598 and it went to 14,700. So that’s how we would like to look at is, because Goa during COVID and post-COVID was still at a very-high level and we are very pleased with the performance of all these Mumbai, Delhi, Bengaluru, all these places, we have very strong presence. The only city that we miss for us with strong company-owned presence is Pune. Which is also strong. It is going very strong market.
Prateek Kumar
And you also highlighted on like people or travelers are generally cautious on booking in near-term and immediate term kind of, but how is this general to understand how is this mix evolved from pre-COVID like people wanting to book in one month or Three-Month or Six-Month in terms of industry tender yourself?
Puneet Chhatwal
Nothing, the visibility the booking window is becoming shorter and shorter. More-and-more people that travel don’t make all these plans so much in advance, except for the usual. You have when you have school holidays and you have the summer vacation, the Christmas, if you take that out, the rest of the extended weekends, et-cetera are just planned, maybe sometimes even 24 hours in advance or 12 hours in advance. Versus what we have highlighted since last 10 quarters that when people had to drive themselves during COVID, they got used to a different kind of holiday with the family. And many of them never went back to the old way of, you know, using other mediums or other help to drive, they would just get into the car and drive themselves and that is a lot. So the booking window except for the main holiday season is becoming shorter and shorter?
Prateek Kumar
And one last question on-demand again. Like regarding this global tariff or is there something which you envisage on-again foreign tourist or overall business sentiment.
Puneet Chhatwal
Fortunately, nothing comes to my mind on how we — how this sector could be impacted with tariff. Yes. At the moment, I don’t know what one could do is increase what GST or that they cannot, the influence cannot come from overseas.
Ankur Dalwani
Also —
Puneet Chhatwal
I meant some business sentiment.
Ankur Dalwani
Yeah. In fact, the business sentiment it could help India because it’s one of the beneficiary of the tariff regime is that India has got relatively lower tariff than neighbors. So if — and if those continue to hold, you could see more visits coming into India for doing more-and-more of sort of outsourcing from here. So I think that’s in a way not a negative, but definitely could be a positive also.
Puneet Chhatwal
Actually, to the other question, which was had put in or see the — it could be a great opportunity to channel some of the business from Europe instead of going to US to get them to India. The flying time is not any different. It’s the same.
Prateek Kumar
Yeah. Sure, sir. I’ll turn it back to the queue. Thank you.
Operator
Thank you. The next question is from the line of Sameet Sinha from Macquarie. Please go-ahead.
Sameet Sinha
Yes, thank you very much. A couple of questions here. First was in one of your slides where you showed demand-supply by city, it showed Delhi going into negative. Now did that happen in the beginning of the year or is that something a new development?
Puneet Chhatwal
Delhi going…
Sameet Sinha
Negative supply.
Ankur Dalwani
Yeah, this is more statistical. I think this is STR data. So we’ve checked it with them, but it’s not necessarily representative of the trend. Essentially, this is probably what has happened and if you see the supply going negative, some hotels were not available. Effectively the room nights available have gone down statistically. But in general, if you see across-the-board, supply is growing in the region of 2.5%, 3%. I think that’s what the trend we kind of picked-up. Some of this, I would not really read too much into the minus 1.2 number here, but that’s more of a statistical number. Overall, I think the supply is at that loan, which we mentioned earlier.
Sameet Sinha
Got it. Okay. Thank you. The second is in terms of — if you look at the interplay between ARR and occupancy, can you talk about what the incremental margins are on both these kind of drivers, ARR and occupancy?
Puneet Chhatwal
See, if the business comes through rate increase, the flow-through is very-high, could be 80%, 90% or even 100%. Depends on what rates we are talking about. And occupancy driven you will still have the operating cost per room. Finding the right balance and the right mix is a good way forward. We see that the willingness of the people to pay for premiumization in India has significantly increased in the last two, three years. Yeah. If previously we spoke about a few 100,000 people today, you can easily say more than 1 million people in India are willing to pay for quality, are willing to pay for experiences and are willing to take more holidays or spend on discretionary expenses like hotels and restaurants.
You know, as an example, it was unthinkable that you could have smaller restaurants, it happened in the West, but not in India so much with 10, 12 seater sold-out for three months before you get a table or a booking. And that too, it’s not sure because if you are not exactly filling up the restaurant maybe is difficult. And the kind of spend that you have in one evening out there in such places. So these are — these are new trends that are emerging and something that we as a sector should also observe closely to see if that’s what some of our places should look like in our hotels in light of our asset management initiatives.
Sameet Sinha
Got it. That makes sense. A final question, if you look at your slide number 38 where you talk about your opening schedule of the schedule of the signed pipeline. Have you adjusted that number downwards? You say it had gone down by like 10% or so for ’26 and ’27?
Puneet Chhatwal
Downwards…
Ankur Dalwani
This is we give — we give the guidance on pipeline every quarter. And like we say also as a put a disclaimer at the bottom saying because a lot of this is a function of approvals, etc for the hotels to come up. So when we give a guidance for what will open in ’26 and ’27, for example, on this page, it is the best available estimate we have as on-date, which basically factors in what we know as to what is going to happen with the partners, particularly the managed hotels and also our own hotels. And I think this in a way kind of talks about the basic concept of demand-supply being in deficit because it’s very hard to put a timeline on saying when will this new supply come in? And in a way, this does get updated every quarter.
Puneet Chhatwal
You have a point actually, we will do a better job next time on this. This is not right representation the way you have asked the question. So, see, this, for example, does not include anything which is a conversion. A conversion may come in June and may go online like we have now two properties which we have opened in Bangalam totaling 112 rooms. They never hit the pipeline. They come in and then they are straight away going to open. So like we had the claridges we signed, we announced and four weeks later, we open. So a lot of this pipeline because of governance reasons, we give exactly what is there, which is signed, sealed, legally valid in doing these projections, but this number does not include the possible delays where the project may get stuck, but also does not include many conversions like a tree of life, existing portfolio that came to us. It was not a lot of rooms, but it came and we took it over. Similarly, there may be other consolidation mergers, acquisition opportunities. We can’t list them here because they may not even be in negotiations. There may be no negotiations at this point of time. So, we have to extrapolate based on what we know and what all could happen, including based on our past experience of how many conversions that you get to the right number.
Sameet Sinha
Got it. If I can just sneak in one more. Previously used to give the pipeline number beyond ’27 as well, but it’s not there. So how should we kind of put that in our model?
Ankur Dalwani
I think the total pipeline is there, which is the total signed pipeline. And I think effectively, if you see, we have got roughly about 3,000 to 3,500 keys opening in the next two years, if you look at the numbers which we have put out, not factoring any potential conversions, which might happen. And this is — you know, so essentially between the 15,000 would get absorbed by FY ’30 or FY ’31 kind of a number, right, if you think about got it.
Sameet Sinha
Okay. Thank you very much. Thank you.
Operator
Thank you. The next question is from the line of Achal Kumar from HSBC. Please go-ahead.
Achal Kumar
Yeah, hi. Thanks for taking my question. So my first question —
Operator
Sir, your audio is too low. Can you please increase the volume?
Achal Kumar
Is it better now?
Puneet Chhatwal
Yes, yes, sure.
Achal Kumar
Yeah, yeah. Hi, sorry. Sir, my first question was about your FY ’30 target which you gave where you’re expecting revenue to double by FY ’30. So on that, I just want to understand, you know, how much of the growth you think will come from the room addition and how much from the other KPIs, other sectors including RevPAR and all and do you think most of the growth will come will be the front-loaded? I mean, you already reported 23% growth in revenue this year, while the overall growth is like 11.5%, 11.5% CAGR. So do you think most of the growth will be front-loaded?
Puneet Chhatwal
You know, Achal, are you asking us to increase the guidance for the revenue? I remember your questions from Capital Market Day. See that we will be doing what is to be done, but your question so-far is interesting that your double-digit growth, let’s say 10% per annum for the next four, five years could be the CAGR that will come in one year, it might be 14, another year might be 8% or then it’s 12% and then it’s 11%. These things happen in our marketplace, right? But it will remain strong. Why it will remain strong is it’s also coming in new markets, which has limited supply or will not get so many additions to supply. If you looked at our presentation, we have also doubled the number of places we are present in terms of our footprint. Now that’s one.
The second will come through what we said our asset management initiatives. Third comes through new hotels. So that is how we keep achieving that high number despite our base being so high, look at our base in Jamal Palace or in a, it’s a very-high base. And on that high base to say that we’ll keep having that growth in perpetuity, that means a lot of things in India and in the world have to keep working very positively. But what makes us so confident of achieving that number is our very strong not like-for-like growth with 130 plus hotels in pipeline, what we know today and more will keep getting added, so that we are very well-positioned to achieve the guidance that we have given. And in that guidance, Achal, if you remember, we always say we promise, we deliver and ideally we keep delivering a little bit more than what we have promised.
Achal Kumar
I agree on that. I agree on that part. Yeah, thanks. My second question was about the rising competition. Obviously, in any industry, the demand is strong and capacity is tight, new players join in. And recently, I think Indigo announced to open additional 30,000 rooms by 2030 along with ACOR. And on the other side, if you see the GIC is taking bit at active part, they have taken — they bought 35% stake in five hotels and they are spending almost INR1,000 crores there. So how do you see the competition rising? I mean, do you think the industry is still and expecting this demand versus supply growth or the gap between demand-supply to continue for four, five years or do you think things could change? So how do you see the industry structure actually?
Puneet Chhatwal
You know the there will be. See, as India gains in importance as a strong economy, more-and-more brands and organisations would want to have presence in India and a strong presence. And I think all companies, as far as I can see have made big plans. The benefit we have is we embarked on this journey some time ago. And just given our signings of 74 contracts last year has given us a very big boost and a and an edge and given that we are today net-debt free, having a gross cash of INR3,000 crores and generating cash as we speak, positions us very well to take advantage of any other inorganic opportunities that might come.
Now what others are doing that is their entitlement to do, but I can only say that we as management, this is what our thinking has been and also very important that we are not in the business of counting rooms only. So we have certain legacy, we have certain commitment to — through our businesses to the nation and we will keep doing what we think is right and not follow blindly some other thing, although the consequence of all our growth is also that it is increasing our footprint and number of rooms, the number of hotels, but that is not our sole objective. We are going to go for profitable and sustainable value-creation. Right. Fair enough.
Achal Kumar
And then my last question was about the cost-efficiency. Obviously, you keep rising your room inventory, keep rising and then definitely you’ll have cost-efficiency playing around. So going back to one of the previous question around the cost-efficiency. So how do you see the cost-efficiency could play? I mean, according to your plan, do you think 1%, do you think 5%, do you think 2% the cost-efficiency could continue to play? And when we talk about the cost-efficiency, especially particular to this quarter, Q2, I mean, sorry, going-in Q1 and with the oil — lower oil price, what kind of tailwind you expect to your EBITDA margin in the next quarter?
Ankur Dalwani
Yeah, Achal, hi. So I think without getting specific on margin for the quarter. I think if you go back to the quarterly history of FY ’25, you will see that even in-quarter one, which was the lowest quarter for us in terms of revenue growth, we managed to sort of tweak out efficiencies and get our EBITDA actually growing at close to 10%, 11% versus a revenue growth of 6%. So I think the endeavor here is to keep a check on cost. There are puts and takes on the cost side, as we’ve expressed in the past, as we enhance our brand scale, there will obviously be some investments we have to put back as on promoting the brands. And also as we move towards a more sort of digital investments, which we keep doing to enhance our competitiveness. A lot of that cost now goes through the P&L just because the nature of the investment is — has not changed from capex to OpEx.
So I think there are things which kind of take-away from margin, but also create long-term value. Also, the ones which will aid to the margin today is really the leverage we continue to get given that a lot of the growth is coming through here are expansion and that helps us in passing-through any normal inflation. In any upcycle, we have seen that our ability to pass-on — for the sector to pass-on inflation and maybe comfortably pass-on inflation, maybe 1% to 2% over that continues to be there. But like I said, every cycle is different, there will always be challenges and there will always be puts and takes. So overall, we seem — we look — we feel comfortable about the direction we are on. And in terms of margin, there is a positive bias, which we continue to hold for this year as well.
Achal Kumar
Okay. Thanks. Thank you. I’ll come back-in the queue.
Operator
Thank you. We’ll take the next question from the line of — we’ll take the next question from the line of Abhay Khaitan from Axis Capital. Please go-ahead.
Abhay Khaitan
Hi, thank you for the opportunity. So my question is specifically on Ginger brand. So in the slides, we can see that they have seen a RevPAR growth of 8% to 8% for FY ’25. Now with new initiatives on ginger and positioning it as a lean lux model now. Would it be fair to expect ARR growth for this segment to be higher compared to other brands or do you think that it is still some time away?
Ankur Dalwani
So see, Ginger is actually very well-positioned in the mid-scale segment. This is a segment which is relatively more price-sensitive as compared to, let’s say, the luxury and upscale segment. And actually getting a 10% and 8% kind of growth rate on RevPAR is actually very commendable for this segment because relatively, the growth rates in this segment is lower compared to the overall hotel segment industry, especially the luxury end-of-the market.
So — and also the water will happen in case of is that there is a completion of the lean lux program, which will actually get done in this — in this year, which means almost the entire inventory will be fully renovated in terms of getting it to a lean X position, which will help us in pushing the ARR through. And this is actually a great debt segment of great the brand is very well-positioned to target not only consumers, but also corporate where the price sensitivity is a little bit more, but you know, they have a long strong preference for them to come under the Ginger brand because then they become part of the network because it not only opens up them to stay-in the ginger hotel, but next time the person could go and stay-in a or a you know or a Taj. Yeah.
Abhay Khaitan
Got it. Thanks for this. The second question is on the Slide 26, you have mentioned the split of travelers, where you have mentioned 55% of demand is coming from transient. So can you please throw some light on how much of this transient would be business travelers and how much would it be leisure travelers?
Ankur Dalwani
Well, it’s very hard to give that breakup, but generally transient are people who are basically where we have non-negotiated rates. These are essentially could be smaller corporates as well, but this would basically be people who are — with whom we don’t have a negotiated contract. I think that’s how we measure that segment. The pricing power is maximum in that segment and therefore, we feel very comfortable with this 50%, 55% share which we have. This is something which has actually been there for quite some time. It’s not a new development. And this will largely everything be retail, but we don’t really have a split of our retail and corporate. We don’t actually have that separately.
Abhay Khaitan
Got it. Thank you. That’s all sir. Thank you.
Operator
Thank you. The next question is from the line of Prashant Biyani from Elara Capital. Please go-ahead.
Prashant Biyani
Thank you for the opportunity. Mr. Dalwani, how much of the 60% 65% renovation cost of INR1,200 crore can pass-through P&L?
Ankur Dalwani
All that is renovation capex, so it will all get capitalized. It will come to the P&L under form of depreciation as and when it is completed. So obviously, first it will get spent and then get capitalized.
Prashant Biyani
Then, sir, just a related question on margin. If most of the renovations is going through the balance sheet, then shouldn’t a mid-single digit or a low double-digit ARR increase should lead us to a healthy 150 to 200 bps margin expansion.
Ankur Dalwani
Thank you. Yeah, like I said, not getting into specific guidance on margin, but the — I mean, I’ve answered this question in the past, I’ll just repeat that there are puts and takes on the margin side and as the years have just started, we’ll just see how the quarter goes. Given that we are just sort of seeing good momentum first-quarter. We are hopeful that the positive momentum, which we’ve seen on the four quarters continues. There is — as mentioned earlier in the call, there are there is — I guess there is no pressure as such on rates, but obviously, one has to be watchful about the increasing competition and keeping in mind if there is any impact of the — the — of the global situation. As of now for the month of April and early May, we haven’t seen anything come through, but we just watching that.
Prashant Biyani
Okay, sir, that’s it from my side. Thanks.
Operator
Thank you. Ladies and gentlemen, this will be the last question for today, which is from the line of Aliasgar Shakir from Motilal Oswal Mutual Fund. Please go-ahead.
Aliasgar Shakir
Yeah. Thanks for the opportunity, sir. You have partly answered my question. Question is on the ARR. You made a comment, sir, that Goa this year was slightly soft because of the high base. So in that context, a couple of questions. One is, I mean, which are the regions or do you see many of the regions, given that last two years have taken sharp ARRs would be sitting on high ARRs and probably that could have some factor because of which RFPAR could be a kind of at a peak level? And the second thing is that you also mentioned that you are premiumizing a lot of your properties. So how much of this ARR could be because of upgrades and how much it could be entirely just price increases?
Ankur Dalwani
I think on RevPARs across the cities, I think like was mentioned, even for this year, it’s been a pretty secular growth across the cities, especially the big cities. You know, Goa for us is on a consol basis is effectively a much very small number. So it doesn’t impact the overall RevPAR numbers for us, which continues to be very healthy. I mean, if I look at April RevPAR, it’s a comfortable mid-teens kind of a number. So I think in general, you know, in a portfolio which has 200 — close to 250 operating hotels, you will always have some city doing better and some city going a little weaker. So I think that’s the way the diversification also helps us. As far as your other point is concerned, which is how much is it on account of asset management, that’s again difficult to answer, but one-way to think about is the RevPAR premium we enjoy in the market. And if I look at the absolute RevPAR premium, which is very-high, it’s about 70%. So not saying that large portion is because of our asset management, but it’s a combination of a lot of things. Asset management, also the location of the hotels, the brand-name itself, the loyalty program and the entire set of corporate advantages which are out there, which actually attract people to come to our hotels. So hard to split this into saying that this is pure industry versus pure you know our competitive advantage, but all of this kind of goes together to bring us to that kind of number.
Aliasgar Shakir
Got it, sir. It is very useful.
Puneet Chhatwal
With that last question, I would like to thank everyone who participated in the call today. Thank you for your support. We look-forward to interacting with you with the Q2 results and any offline questions anyone may have, please feel free-to contact us or any member of our team. Thank you, everyone, and have a wonderful evening.
Operator
[Operator Closing Remarks]