Chalet Hotels Limited, owner, developer, and asset manager of high-end hotels in key metro cities of India, announces its results for the second quarter and six months ending September 30, 2020.
The temporary disruptions caused by the pandemic, coupled with its impact on economies world over and India, is something one had never anticipated. These unprecedented circumstances are likely to permanently change the way businesses are conducted, ensuring those that are agile and innovative, endure these tough times.
Chalet Hotels Ltd.focus on the three key levers that resulted in a positive EBITDA of Rs. 30 Mn., include preserving liquidity, cost rationalization and our mixed-used development strategy. The cost base on sequential basis has increased marginally while revenue growth has been 15% for the hospitality division.
On a sequential basis with all hotels being operational, our occupancy was higher by 100 bps and ADR saw a 4% improvement, resulting in a 9% RevPAR growth compared to Q1 of the same year, as we see a gradual return to normalcy.
At the start of the financial year, the company had devised a two-phase strategy to combat Covid-19:
In the Phase 1, over the last two quarters the company focussed on surviving the Covid-19 crisis: Key measures included cashflow management led by reviewing projects in the pipe-line, while they continued to operate the lease-rental business. Initial lowering of costs was attained through renegotiating AMC’s, right sizing of teams and temporary closure of properties. Their hotels also extended support to the front-line warriors of Covid-19.
In the Phase 2, the company’s effort is revolving around rebooting, re-inventing and racing ahead. Besides the company is focussing on:
- Opening of all hotels and resuming of F&B services (dine-in and liquor), for both in-house and outside guests
- Effective cost saving measures since February 2020 has resulted in H1FY21 expenses going down by 65% over H1FY20
- Rationalized manpower cost at both the Hotels and Corporate headquarters.
- Focused on the demand for food delivery and food take-away services
- Centralization of Finance and Human Resources functions, for improved efficiency.
- Outsourced non-core functions like laundry.
- Generated revenue from new categories of guests like Special Purpose Guests (SPGs), seafarer groups, cargo airline crews etc.
- Robust hygiene, sanitization and safety protocols and SOP’s rolled out, considering new norms
Performance for Q2 & H1FY21:
Segmental Performance for Q2 & H1FY21:
- ADR for the quarter improved by 4% sequentially to Rs. 4,030 as compared to Q1FY21
- Occupancy expanded by 100 bps sequentially to 25% as compared to Q1FY21
- RevPAR for the quarter improved by 9% sequentially to Rs. 1,007 as compared to Q1FY21
Development Pipeline Update:
- The Company has recommenced work for commercial projects at Renaissance Complex, Powai, Mumbai and Marriott Complex, Whitefield, Bengaluru
- The lobby renovation work at Renaissance, Powai is underway. Its design aesthetics are futuristic, easing the check-in process and create an unmatched customer experience
- The proposed Westin Hotel at Hyderabad was scheduled to open before time but has now been pushed back to the original opening in 2021
- All other projects have been put on hold and will be reviewed during the course of the year
Sanjay Sethi, MD & CEO, Chalet Hotels Limited, said, “Through this tough period, it is the mixed-use development strategy that has worked to our advantage, delivering steady rental revenues and cashflow support. As the situation evolves, we continue to re-engineer our operations and strategize toward permanent cost efficiencies and strengthening operational performances.
We look forward with cautious optimism as shoots of normalcy emerge with the operationalization of domestic air traffic, the international air bubble agreements, relaxation on quarantining requirements, decrease in daily reported cases and mortality rates and positive news on the vaccine development, all of which provide some visibility to business revival.”
