EIH Ltd., the flagship company of The Oberoi Group, remains confident of driving room rates higher, even as it navigates seasonal disruptions and macro challenges, Managing Director and CEO Vikram Oberoi said during the company’s earnings call.
“Our view is that for the quality of hotels that we operate, we should be demanding higher prices,” Oberoi said adding that room tariffs in India remain significantly lower than in major Western cities from where a substantial portion of the group’s guests originate, including Europe and North America.
The depreciation of the rupee has further enhanced India’s price competitiveness for overseas travellers. “We will continue to drive rate,” he said, cautioning against drawing conclusions based solely on third-quarter performance, given the multiple external factors that influence travel demand.
During Q3, occupancy levels were in the 66–68% range, reflecting marginal growth. Average Room Rates (ARR) rose 9–11%, resulting in healthy growth in Revenue Per Available Room (RevPAR), despite disruptions in December.
Flight interruptions during the month led to 26% higher cancellations in the first two weeks, impacting occupancy and resulting in a lower Revenue Generation Index (RGI) for the quarter. Renovation-related closures at Jaipur and The Oberoi Grand also weighed on overall numbers.
The luxury hospitality segment in India recorded 9.1% growth in Q3, while Oberoi Hotels posted 5.4% growth. The comparatively slower growth for the Oberoi brand was attributed to the addition of new properties — Oberoi Rajgarh Palace and Oberoi Vindhyavilas — both currently in the ramp-up phase in terms of occupancy and ARR.
EIH’s portfolio now comprises 4,209 keys, of which 3,801 are in India and 408 overseas. Of the total inventory, 3,338 keys are owned, with the rest under management contracts.
During the quarter, the company added four managed hotels — Oberoi Kabini, Oberoi Hampi, Oberoi Coorg, and one property in Cairo. The Oberoi Rajgarh Palace, which opened recently, has received an encouraging initial response and is in the ramp-up stage.
Looking ahead, EIH has a strong expansion pipeline of 30 hotels with approximately 2,450 keys to be added over the next three to four years.
On the international front, Chief Financial Officer Vineet Kapur said performance was robust both for the quarter and year-to-date. Except for Bali, which remained largely flat compared with last year, properties in Lombok, Mauritius, Sahl Hasheesh and Marrakech posted healthy growth.
EIH is also making a measured entry into the luxury residence segment. The four-bedroom Naila Fort in Jaipur, owned by Oberoi Hotels Pvt Ltd., is offered at ₹12 lakh and is not rented out individually. The company is evaluating a second opportunity in a destination where it already operates. While several owners have approached the group for management of luxury residences, Oberoi emphasised that the company would focus exclusively on ultra high-end offerings.