Hotels Company Limited (IHCL) is a name that has become synonymous
with grandeur, luxury and service. Starting with a minuscule
capacity of 240 room three decades ago, the company has grown into
a powerful monolith and operates 37 hotels in India and 16 abroad.
IHCL has a presence in every segment. Its hotels have been grouped
into various segments, namely luxury, business, leisure and
from having the largest chain of hotels, its competitive edge
stems from well-positioned properties in the business districts of
Mumbai and Delhi. It also has prime properties in key cities like
London, New York, Washington, DC, Chicago, the Middle East and
Africa. IHCL's revenues have dwindled on account of a fall in
business and tourist arrivals. However, the company is undergoing
a restructuring exercise, which is expected to yield good results.
The long-term prospects of this company appear satisfactory.
Limited is one of leading companies in the hotel industry. The
company's name was changed to EIH from East India Hotels to
enhance its offshore image. EIH has become synonymous with class
and style. The company has come a long way and is now one of the
most recognised names in the industry. EIH owns and operates the
Oberoi chain of hotels in India and abroad. EIH's operating
margins, like many hotel companies, have been declining in the
last two years.
derives a major chunk of its revenues from its Mumbai and Delhi
properties. The company's operating income is highly dependent on
the business traveller segment, which fluctuates with the economic
and investment climate in the country. In order to mitigate this
impact, the company has decided to construct medium-priced hotels
in smaller cities and towns like Pune. Considering the efforts
initiated by the company to excel in the industry, EIH presents
bright future prospects.
Leela Venture (HLV), a prominent player in the luxury hotel
industry, runs two properties, namely the Leela (near the
international airport at Mumbai) and the Leela Beach, Goa. Its
luxury hotel in north Mumbai contributes significantly to the
groups income. Being close to the Sahar airport, it caters
mainly to foreign business guests. The awards won by the Leela
group of hotels over a number of years bear testimony to its
outstanding performance in the hotel industry.
hotel, which is recognised for its contribution to the Indian
tourism and hospitality industry, has planned to set up a string
of corporate hotels in the metros, starting with Mumbai. In fact,
HLV is already working towards this direction; it has tied up with
the Canada-based Four Seasons group of hotels that will provide
the Leela with its expertise. The hotel even has very ambitious
expansion plans that include setting up properties in cities other
than its existing locations. This will involve an investment of a
huge amount over the next couple of years, and financing the same
will require substantial equity dilution. Poor performance clocked
by the hotel and tourism industry over the past many years is
reflected in the lacklustre bottomline of the existing companies
in the industry.
also see : Earnings sensitivity
hotel industry - an overview