• OUTLOOK ARENA
  • VIEWS ON NEWS
  • SEPTEMBER 22, 2000

Hotel companies to increase room tariffs

Hotel companies are planning an increase in room tariffs in October’2000. Though most of them have yet to decide the quantum of increase they are looking at raising the tariffs at select cities like Mumbai, Delhi, Calcutta and Bangalore.

Considering that the industry has not raised tariffs for the last two to three years, this spells good news for hoteliers. This move has been triggered off by better occupancy rates in the metro city hotels in the first half of the current financial year.

This increase in tariffs would add to their bottomlines, and most hotel companies are expecting atleast a 20%-25% increase in operating profits in the current year. The improved economic scenario is finally having its manifest effect on the hotel sector.

The news about better occupancy rates in the current year has got reflected in the share price performance of some of the hotel companies like Indian Hotels Co. Ltd (IHCL) and EIH Ltd in recent months. Besides this the rupee depreciation too has added to higher revenues for the industry as over 60% of its earnings are in foreign exchange.

On the current price of Rs 237, IHCL is trading at 9.4x FY00 earnings and on the current price of Rs 185, EIH is trading at 13.4x FY00 earnings.

Copyright © Equitymaster Agora Research Private Limited. All rights reserved.
Any act of copying, reproducing or distributing this newsletter whether wholly or in part, for any purpose without the permission of Equitymaster is strictly prohibited and shall be deemed to be copyright infringement.

LEGAL DISCLAIMER: Equitymaster Agora Research Private Limited (Research Analyst) bearing Registration No. INH000000537 (hereinafter referred as 'Equitymaster') is an independent equity research Company. Equitymaster is not an Investment Adviser. Information herein should be regarded as a resource only and should be used at one's own risk. This is not an offer to sell or solicitation to buy any securities and Equitymaster will not be liable for any losses incurred or investment(s) made or decisions taken/or not taken based on the information provided herein. Information contained herein does not constitute investment advice or a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual subscribers. Before acting on any recommendation, subscribers should consider whether it is suitable for their particular circumstances and, if necessary, seek an independent professional advice. This is not directed for access or use by anyone in a country, especially, USA, Canada or the European Union countries, where such use or access is unlawful or which may subject Equitymaster or its affiliates to any registration or licensing requirement. All content and information is provided on an 'As Is' basis by Equitymaster. Information herein is believed to be reliable but Equitymaster does not warrant its completeness or accuracy and expressly disclaims all warranties and conditions of any kind, whether express or implied. Equitymaster may hold shares in the company/ies discussed herein. As a condition to accessing Equitymaster content and website, you agree to our Terms and Conditions of Use, available here. The performance data quoted represents past performance and does not guarantee future results.

SEBI (Research Analysts) Regulations 2014, Registration No. INH000000537.

Equitymaster Agora Research Private Limited (Research Analyst)
103, Regent Chambers, Above Status Restaurant, Nariman Point, Mumbai - 400 021. India.
Telephone: +91-22-61434055. Fax: +91-22-22028550. Email: info@equitymaster.com. Website: www.equitymaster.com. CIN:U74999MH2007PTC175407