Good morning, ladies and gentlemen, and thank you for attending this virtual meeting. I'm pleased to welcome you on behalf of EIH Limited and SKP Securities to EIH Limited's Q1 FY '27 earnings webinar.

We have with us Mr. Vikram Oberoi, Managing Director and Chief Executive Officer, and Mr.

Vineet Kapur, Chief Financial Officer. Friends, this virtual meeting is being recorded for compliance reasons, and during the discussion, there may be certain forward-looking statements that must be viewed in conjunction with the risks that the company faces.

We'll have the opening remarks from Mr. Oberoi followed by a Q&A session.

Thank you, and over to you, Vikram.

Good morning, ladies and gentlemen, and a warm welcome. You would have seen our Q1 results, and there're just a couple points I'd like to highlight.

One is that we had both on standalone and consolidated strong revenue growth. EBITDA margin was impacted for several reasons, which Vineet and I will cover during the presentation.

The other point I wanted to highlight was that really what has stood out for us is strong domestic demand. Sorry, there's a slight echo.

Strong domestic demand despite the West Asia crisis that impacted our foreign arrivals at our hotels. We were still able to do well and drive revenue growth largely driven by the domestic market.

With that, I will hand over to Vineet to make the presentation, and then we'll be able to answer any questions that you have. Thank you very much.

Thank you, Vikram. Good morning, everyone, and thank you for joining us.

We'll begin with a brief overview of our performance for the quarter followed by key business updates, and then we'll open the floor for questions. The industry performance for Q1 was positive both for occupancy and ARR.

Occupancy was higher by 2% to 4%, and ARR grew by 6% to 8%. The domestic demand was buoyant, which offset the impact of low foreign bookings on account of geopolitical situation.

For the current year, we continue to see increase in ARR due to limited supply and MICE events like BRICS as well as Aero India show, which will happen in the later part of the year. We hope and expect the foreign tourist arrivals coming back to normalcy in Q3 and Q4.

Considering our management perspective, we are working on a robust expansion plan of almost 30 new properties, which will be in operation by 2031 which will be both managed as well as our owned hotels. Looking at the RevPAR and the leadership over the comp set, EIH continues to maintain leadership over the competition set.

In Q1, EIH hotels occupancy improved versus competition. We were Toh time mein [1

ghante? ka farak hoga]...

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Sorry.

They should come to Mumbai.

The MPI was 108 as compared to 106, while the RGI was flat to last year, which resulted in a RGI increase of 4% from 121, we ended the quarter at 125. 14 out of 15 hotels ranked first and second, wherein STR provides benchmarking.

Out of that, 8 hotels

Sorry, somebody... Vineet,

Vineet, just one sec. Friends, some of you have probably unmuted yourself and that's causing a disturbance.

Request you to kindly mute yourself. Thank you.

Apologies for that.

No problem. Vineet, you just want to run through this slide again, because it's an important slide, and there were people talking in the background.

If you could just run through that again, thank you.

EIH continues to maintain leadership over the competition set. In Q1, EIH hotels occupancy improved so MPI was at 108 as compared to 106 last year.

Though the ARI was almost flat, both 115 and 115, but the increase in occupancy helped us grow the RGI, where we went from 121 to 1 125% over our comp set. So 14 out of 15 hotels are ranked first and second wherein STR provides benchmarking.

Out of that, 8 hotels are ranked first, and 6 hotels are ranked second in the comp set.

Vineet, may I just add a couple things that maybe relevant, and I'm sure people on the call will be aware of this. Sorry if you're aware of what I'm saying, please forgive me.

People give data on comp set information, and really you can, depending on who you select as your comp set, you can get varying numbers. I think it's important for one to understand which hotels are in the comp set, because if you really were to establish your comp set with doing it as fairly as possible to truly reflect who your competitors are, then your RGI numbers are really of value.

If you select competitors to show good numbers, then obviously, relative to the competition you've selected, you will do better. I think it's very important that at EIH, I can say with absolute assurance that we select our comp set based on what we believe are our true competitors.

We do not do it with the objective of showing good numbers. We do it with the objective of really measuring ourselves against our competitors.

That's why just a deeper understanding of who the comp set is is always useful. Then you can really see, are these really your true competitors or not?

I just wanted to add that to what Vineet was saying.

Thank you, Vikram. Coming on the next slide, which talks about the RevPAR growth of Oberoi brand.

Oberoi brand falls in the luxury segment, and luxury segment saw a growth of 13.2% on RevPAR while Oberoi Hotels saw a growth of 8.2% in Q1. Our Oberoi brand growth was lower than the industry mainly because of Oberoi Rajgarh, which got added last year, and that is still in the ramp-up and the stabilization stage.

If we exclude Rajgarh, our RevPAR growth was 11.4% and considering that we're already working on a very higher base, the growth of 11.4% was still substantial versus last year.

Sorry, please, Vineet. Go ahead.

Coming on the next

on the Vineet, can I just add one thing for Oberoi then? Also

is and

it applies to a lesser extent to Trident. Oberoi Hotels also attract a higher percentage of foreign business, and that was impacted because of the West Asia crisis.

It's Rajgarh, of course, but it's also the West Asia crisis and the decline we saw in people coming in from overseas markets. Of course, we saw buoyant domestic demand, but international rates typically or international guests' propensity to pay is higher than it is domestically.

Yeah. The

the next slide reflects about the Trident. This so Trident brand, which falls in upper upscale segment, for Q1, this segment saw a growth of 9.2% for the industry, while Trident Hotels had a growth of 13.8% both on account of occupancy and ARR.

Our hotels in Mumbai, both BKC and BKC, did well in in in terms of both occupancy and ARR, which reflected a good growth versus the industry for our brand. If we look at RGI, we were at 162 versus 155 last year.

Looking at the Q1 occupancy trends for the month, occupancy was higher than last year. Last year got impacted, specially May, got impacted by Operation Sindoor where that resulted in a occupancy degrowth or almost going down to 62%.

We saw a good occupancy as well as ARR growth in in Q1, and that was in spite of the fact that we got impacted by the Iraq Iran-US war mainly because the foreign tourists. Because of good buoyant domestic demand and good good trends, we were able to offset that.

In in overall in in net, our RevPAR grew from ₹11,352 to ₹12,801. This is this is for all hotels, including managed.

When we look at only the owned hotels, same trend. We were able to to see a good occupancy growth both for May and June.

Also the ARR increased in all the months, which helped us increasing our RevPAR from ₹13,000 to almost ₹15,000 at the end of the quarter 1. Looking at the RevPAR growth by city, all cities showed a healthy trend of growth.

We saw the biggest increase happening in Shimla and Chandigarh mainly again because of last year they had got badly impacted by Operation Sindoor. Mumbai had a good had a good domestic demand on on account of MICE activities, which resulted in a good RevPAR growth for the city.

Jaipur Jaipur got impacted because of lower foreign tourist and foreign bookings, while Hyderabad, we had we had hosted the Miss World event last year which had resulted in a good occupancy as well as RevPAR for us last year. The current year, that was lower in comparison to the last year in Hyderabad.

Looking at the room revenue trends, we are almost seeing similar trends to last year, no fundamental change. Same percentage, same trends, nothing to comment further.

We'll We move to the financials for the for the quarter. We continue to grow.

We we continue to grow our revenue as well as our EBITDA and profit and PAT. For the quarter 1 FY '27, we our sales revenue was at ₹698 crores as compared to ₹609 of last year, which was a healthy 15% growth in revenue.

We also grew on on EBITDA from ₹197 ₹195 to ₹207. On PAT, the growth was much more higher, but not maybe last year was not comparable because we had a one-time impact of Mashobra which which came in last year June.

If we don't consider that, on a on a year-over-year trend, our PAT continues to grow year-over-year and we ended up the year we ended up the quarter at ₹120 crores of net PAT. Same trends for standalone performance same in numbers in terms of growth, revenues as well as EBITDA and the PAT mainly in line with our consolidated numbers.

If we look at our cash flow funds position, we continue to have healthy cash healthy cash balance and funds at the end of the quarter. It gives us good the the good cash position will enable us to support our long-term growth plans in the coming next 3 to 4 years.

Looking at the consolidated funds movement for the quarter, the cash flow from operations was ₹183 crores. We spent one Out of that, ₹148 crores got spent on capex and the projects which we already which were which already in line.

Net in net, we increased our cash flow, our funds, by almost ₹23 crores for the quarter. Looking at the financial statements, as I as I mentioned before, we ended up the quarter at ₹698 crores as compared to ₹609 of last year, which was a healthy growth of 15%.

EBITDA grew from ₹195 to ₹207. It was not in the same line as revenue growth because of couple of impacts we had.

We one is we had Oberoi Rajgarh got operational in Q3 of last year which is still in the ramp-up stage and stabilization phase, so that is impacting our EBITDA percentage for the quarter. On on top of that, we also had few few expenditure which we had done.

We had done a higher marketing expenditure to to make make sure that we have our domestic bookings take care of take care of the occupancy in Q1. At the same time, we spent a little more on IT in in Q1 to support our automation and AI drive.

Also at the same time, we had some write-off because of renovations which we had taken in our Mumbai hotels. Due to those reasons, our EBITDA was not in line with with with the revenue.

If you look at the PAT, not comparable to last year. We ended up we we ended up our PAT at ₹120 crores, not comparable to last year because we had last year impact of ₹110 crores on account of Mashobra.

Same for standalone is exactly the same, nothing different, the same impacts in terms of numbers. I will not talk I will not It's It's in the same line as our consolidated numbers.

Looking at awards and accolades, we continue to get awards for our for our hotels all across India. In particular, the highlight this quarter is the number of awards which we have got for our Rajgarh Palace.

Almost five awards we have received on account of new Rajgarh Palace in this quarter. I'll

just add to that. Rajgarh opened in November, and it already has received considerable recognition, and these awards and accolades are important not only to promote the hotel in the domestic market, but equally in the international market.

We continue to receive very, very positive feedback on Rajgarh Palace.

Yeah. Coming on our expansion plans, these are our seven properties owned as well as through associates, the seven hotels which are in the pipeline with expected year of opening.

Most of them domestic, except for one international, the Oberoi London the expected year of opening is 2028 for that. For Hebbal, just to highlight on top of the two hotels which you're going to have in Hebbal, both Oberoi and Trident, we also have a retail and F&B space of almost 7.63 lakhs, which will come along with our hotels in Bangalore.

The total developable area for Bangalore's over 1.3 million square feet.

Looking at the pipeline summary for managed hotels, total number of hotels which are in the pipeline, both Oberoi and Trident, is 23 with number of keys of 1,833. There was a reduction of one property in this pipeline, which has gone beyond 2032 has got delayed and because of that there's a impact of one hotel as well as 60 number of keys, which has been postponed beyond 2032.

We're not covered that in this list because we are only covering the hotels which will be in operation in next 5 years. These are our footprint.

Total 3,801 keys in India and 408 keys in 408 keys international. Except last year, which we added Oberoi Rajgarh and Bandhavgarh, the most of the additions will be coming in next 2 to 3 years' time.

That's it. I'm through with our presentation.

I leave the time for any questions.

Thank you, Vikram. Thank you, Vineet.

Friends, we now open the floor for the Q&A session. Anyone wishing to ask a question, please raise your hand, and we'll take it up.

We'll take the first question from Deepak Saha. Deepak, please unmute yourself and go ahead.

Thanks, Navin. Thanks for the opportunity, and thanks, Vikram sir and Vineet sir.

Just a couple of questions on the existing quarter. If I see Q1 numbers, 14% RevPAR growth, but EBITDA growth obviously you highlighted.

Just trying to understand, did we have higher share of flight services business, which also impacted the margin? A follow-up on that, how should we look that revenue and EBITDA gap from a full-year point of view, because you mentioned renovation expenses, then ramp-up of Rajgarh, right?

Should we, kind of model out these things to persist in the upcoming quarters, or the expenses are more likely to moderate in the coming quarters from a full-year point of view? These are the first two questions.

Thank you.

Good afternoon, Deepak, or good morning, Deepak. I don't know if it's morning or afternoon.

On renovations, I'll first address your point on renovations. India business is seasonal.

Occupancies fall between April and October, and then rise in the winter months. That's more prevalent in leisure locations, less prevalent in city locations.

Our endeavor always is to minimize any revenue loss, and therefore, renovations are done during these months. In Bombay, both at the Oberoi, Mumbai and Nariman Point, in Q1 the renovations of rooms is taken place, and that will be complete for the month starting October.

Come winter, there will be no impact. You also saw strong growth in Bombay.

The Trident, Nariman Point is a large hotel of 585 keys. Really the revenue loss at that hotel is negligible, if at all.

Similarly at the Oberoi, Mumbai, and similarly with other renovations that we do. The objective is always to ensure that there's really no revenue loss, and we kind of take out areas accordingly.

On Rajgarh, again, Rajgarh is an Oberoi leisure hotel in Khajuraho, and the first or the summer months are very slow months for two reasons. One is generally the hot climate in Madhya Pradesh, which attracts less guests, and both domestic and international, and also the fact that it's a new hotel.

We expect the winter months starting October to do considerably better. I think those were the two things you had asked.

Oh, you are also asked about the flight kitchen business. The flight kitchen business absolutely has shown strong growth over last year as well.

Again driven by good performance on the domestic airlines that we cater to, and also to the international airlines that operate directly from Europe and North America into India.

Got it. That's helpful.

My second question, when I look quarterly numbers, 14% RevPAR growth, but May and June indicates together 22% kind of a RevPAR growth, right? Just trying to understand, do we see this trend persist both in the month of June and May, the kind of trend on the RevPAR side we have seen?

How are we looking for the remainder of the year? Is this is this trend kind of persisting, or is there any one-off on those particular quarters, because 22% month month growth rate that we have seen very strong?

We typically, Deepak, don't make forward statements, and it's impossible to really give you a fair picture of particularly three Q4 because we really look at business on books today vis-a-vis the same time last year. What I can say is for the next quarter, which is Q2, business on books vis-a-vis the same time last year is very positive.

Just one follow-up on that, Vikram sir. If you see last year, we have say BRICS Summit next quarter, right?

This quarter we have BRICS Summit. If I see your Q4 number, despite 6% RevPAR growth, February month you delivered almost 22% RevPAR growth, and we had AI Summit in the same quarter, right, from Delhi.

Can we expect similar kind of advantage or tailwind for this quarter as well, because I think Delhi is almost 10% of the total owned keys. Just I'm not looking for guidance, but directionally, how should we look into that?

Yeah.

I think when there are large events, and there're two events, there's also an event in Bangalore, which is the air show. Even that has a ripple effect across other cities as well, because people coming in from overseas may not just limit their travel to Bangalore.

They'll travel to Delhi, possibly Bombay as well, one or both those cities. There is a ripple effect across.

Anytime there's a big event, it has a beneficial impact for the city as well as for other cities as well.

Got it. One last question before I fall back on the queue.

On the Kolkata Oberoi Grand, if I

Because

Yeah. On the Kolkata Oberoi Grand, now the revised timeline, right?

If you can just help us understand what is the nature of this delay and how firm the revised timeline is, because 2029 seems to be a little far, and how firm these revised timeline is, and what exactly led to this kind of delay versus our earlier expectation of say 2028 when we are expecting all the phases to get complete and open that particular hotel?

Calcutta is an unusual hotel because it's a very old historic building, and anytime you're doing a restoration of an old building, there are unknown factors. Now, what we need to ensure is that the building is completely compliant to safety regulations of today.

When we opened the building up to really see the state of the building, considerable work was required to ensure that it complies with today's safety regulations. This isn't just fire safety, but this is also structural safety, and you can appreciate how old the hotel is and the need to ensure that that's done.

That was one factor, and a large contribution to the change in timeline. Also, I don't know if you're aware, but there was about 2 months ago, just over 2 months ago, an incident that took place in Calcutta where 15 people tragically were killed, and all construction in Calcutta was halted.

Now, when an event like that happens and construction is halted, it may seem, oh, you say it's only 2 months, but there's demobilization, mobilization again, ramp-up again, and that's also caused a delay. This stoppage in Calcutta is still there today.

The authorities are assessing individual building by building and then giving approvals to start work if they find that there are no safety-related issues. Obviously, at our site, there are no safety-related issues, we hope to be able to start with the work again.

The two main factors. The first one is obviously the most significant one.

Delays because of things that are beyond our control also have led to a delay. What I can assure you is that Calcutta is going to be a very special hotel and will set a new benchmark for historic hotels, not only in West Bengal, but also in the nation.

It's something that we, as a country and as an Indian company, are very proud of.

Thank you. That's really helpful.

Thank you. All the best.

Thank you so much. Thanks, Deepak.

Thank you, Deepak. We'll take the next question from Vaibhav Muley.

Vaibhav, please unmute yourself and go ahead.

Hi. Thanks for the opportunity.

Hi, Vikram. Hi, Vineet.

My first question was on flight catering business. It was a follow-up to previous participant's question.

How much was the impact of the change in revenue mix in favor of flight catering business on our operating margins in this quarter? We also generally provide the revenue number for the flight catering business, if you can help with that as well.

Vaibhav, I don't have that number with me, and we're not sitting together. Yeah.

For OFS business, we had a very healthy growth in the quarter. For Q1, OFS business and OFS segment recorded a revenue of ₹154 crores.

Okay. How was this driven by?

Mainly due to new additions in terms of our clients or from higher volumes from the existing clients?

This is also because of new flights, which were added in the operations, and also because of higher business which we got from international airlines, who were mainly running direct flights out of India.

Okay. Regarding the mix change impact on the margins?

OFS business was profitable. I will not say it impacted much on the margins.

All right. Second question on the growth in our brands.

Trident has actually seen a very strong growth of 13.8% RevPAR compared to relatively lower growth in Oberoi. What was the driver for higher growth in Trident for this quarter?

Hello, Vaibhav. I think I mentioned that in the beginning, but I'll say it again.

One is that Oberoi does receive a larger percentage of foreign travel, and foreign travel was impacted. That's one reason.

We also have seen very strong demand in Bombay. This actually even includes the Oberoi, Mumbai in addition to the two Tridents.

I know you're referring to the Trident numbers, and the two Trident hotels in Bombay have a large key count. I mentioned Trident, Nariman Point has 585 keys and Trident, Bandra Kurla has 430 keys.

These are large hotels that have done very well.

Understood, sir. Just lastly, if I can add on the Oberoi Rajgarh piece, we have seen relatively subdued performance in the summer market.

Can you provide some color in terms of how much time will it take for this hotel to stabilize going forward, and what kind of growth can we expect in the winter season? That's it from me.

It typically takes hotels 3 years to stabilize. Leisure hotels typically take a longer time.

If you're in a city hotel, if the market is very buoyant, it could take well under 3 years. We saw that with the Oberoi, New Delhi, that ramped up very quickly.

It was an existing hotel. My guess is the Oberoi Grand will be similar, because it's an existing hotel in a city location, a prime city location.

Leisure hotels depend on our travel partners also promoting the hotel and the destination, and that takes a longer lead time. To answer your question precisely, I would say that it will take a 3 years for the hotel to stabilize.

Understood. Perfect.

Thank you, and all the best, sir.

Thank you very much.

Thank you, Vaibhav. We'll take the next question from Amit Agarwal.

Amit, please unmute yourself and go ahead.

Good morning, everyone. How are you?

Hello, Amit. Very well.

How are you, Amit?

Good. Thank you.

My question was regarding Amit,

Amit, you need to speak louder.

My question was regarding Wildflower. Have we bid for that?

Can you throw the number what was our bid?

Amit, I'll try and answer that question. The date for the qualifying bid has been changed from 26th of August to the 10th of September.

That's really all I can tell you at this point.

That day, the winner will be announced, or that's the date

No, there are two parts to it. One is a qualifying bid, and then there's a second part, which is a live auction as well.

Those are the two parts.

Okay. My second question is regarding Grand Hotel.

Yes.

How much of the work is complete there, because it's been under construction for 2 years now almost?

I couldn't give you the answer to that question. I'll tell you why that's a very difficult question to answer.

I think the hotel is scheduled to open in September 2028. That'll give you an indication of where we are.

Civil work, structural work is much quicker than interior finishes. Interior finishes take considerable time.

It's very hard for me to say X% is complete and Y% is left. We're hopeful of the hotel opening in September of 2028.

Can you throw the number of rooms we will be having in that hotel?

Yes, 197 keys.

Is that the same number we had earlier also, or have we increased the number?

I think it'll be about the same number. It'll be I think the earlier one may have been, and I don't remember what it was, 200 keys.

It's really a 2 or 3 key difference. The number is not changed in any significant way.

Okay. Thank you.

That's from my side. Best of luck for the future.

Thank you.

Thanks, Amit. Thank you so much.

Thank you, Amit. We'll take the next question from Madhav Aggarwal.

Madhav, please unmute yourself and go ahead.

Yes. Hi, thanks for the opportunity.

I wanted to confirm the opening dates. For your owned Goa hotel, in the presentation, you have mentioned expected year of opening to be 2028, but in the annual report, if I see, you have mentioned the operations will commence in late 2029.

Similarly, for Tirupati and Hebbal, if you can confirm the expected year openings.

The annual report would be a fair report to go by as far as opening dates are concerned.

Okay. Just to confirm, on the profitability front, mainly the impact of on the EBITDA margins what you mentioned, fundamentally margins should for the existing hotels, they should go up, right?

Because as you have taken rate hikes and all, the impact is mainly on account of the mix change and the marketing expenses and IT expenses, right?

Also renovation as well. Renovations will continue.

Of course, they we're over in Q1, but renovations are also taking place in Q2. In Q3 and Q4, there will be really no significant renovation.

All

right. Thanks.

Thanks, Madhav.

Thank you. Thank you, Madhav.

We'll take the next question from Raghav Malik. Raghav, please unmute yourself and go ahead.

Yeah. Hi, am I audible?

Yes,

Raghav.

Absolutely.

Thank you. Thank you for the opportunity.

Just wanted to ask, specifically on the Mumbai market. Your portfolio has grown pretty phenomenally compared to what the peer set has reported.

You mentioned Trident had substantial growth. There's also renovations as a result of which you may have got better pricing.

Is this something that we can sustainably see and anything you can comment about the underlying Mumbai market and how that's tracking? Really

the Bombay market has been strong. I'm sure that's reflected in if you have access to STR data for the city, it'll be reflective of that.

I think we've done better than market, and our endeavor always is to do better than market.

Sure. This number, this 20% outperformance could kind of track similarly going ahead given recent renovations and pricing increase and better occupancy for Trident?

All I can tell you is that we will do our best to drive RevPAR, which is a function of occupancy and average room rates. I really don't want to comment on whether it's going to be 20% going forward, but our endeavor is always to do the best we can.

Sure. I understand.

Thank you. The next question is on foreign tourists.

Obviously that we saw some recovery there. Could you just give us the mix maybe or some indication of where foreign tourists are now trending at and the recent months post the quarter or yeah?

In Q1, there was a fall in international guests coming to our hotels. We saw that in any hotel that has dependency on foreign visitors staying at the hotel.

In Q2, that will and again, I'll mention it. Q2, that we would expect that trend to continue just given what's happening in West Asia.

Let's hope that things stabilize for Q3 and Q4. If that were to happen, which I hope it happens, foreign business should be strong.

Sure. That's very helpful.

Those were my questions. Thank you, and good luck.

Thank you so much. Thanks, Raghav.

Thanks, Raghav. Friends, anyone with a question, request you to please raise your hand, and we'll take it up.

We'll take the next question from Rajiv Bharti. Rajiv, please unmute yourself and go ahead.

Hello. Good morning, sir.

Thanks for the opportunity.

Sir,

on this renovation bit, what are the policy in terms of capitalizing and passing it through the P&L?

The entire cost of the renovation is capitalized. Vineet, do you want to answer that?

If there are any items that have a book value that are not going to be used, that has to be written off. Vineet, over to you if you want to add

We normally follow the rules as per the Companies Act for depreciating all of our assets, the buildings, furniture, fixtures, and all the others separately. If the renovation happens and there is some life of the asset which is still not been used, that is written off and charged to the P&L.

Sure. In this quarter's P&L actually, there's no renovation-related capex partly which is running through the opex line item, right?

Because if I let's say strip out past profitability levels of your OFS business from your given EBITDA number and also something on the fee business also, if you can call out what is the fee you generated this time, the base business EBITDA seems to be down some 400 basis point in terms of the let's say the standalone EBITDA adjusted for these two line items. Just want to understand

If I just bifurcate that amount if I look at versus last year EBITDA on a like-to-like basis without Rajgarh itself if you just compare, as against our 29% EBITDA for the current quarter, if I look at like-to-like basis and take out the Rajgarh, that brings our EBITDA to almost 30.6%. If I compare that with versus last year, we have impact of roughly ₹9 crores for the quarter.

We had mentioned we got impacted by few other factors in the quarter. One is the power and fuel went up because of the Hormuz crisis, the Iran-US war.

That had impact on our cost because of the increase in cost at the hotels. We had done almost ₹4 crores of extra marketing expenditure to make sure that we get extra domestic bookings to offset the international tourist arrivals, which was actually below by 10% in Q1.

We had also done some IT-related expenditure for automation. We had a impact because of renovation, which was to the tune of ₹5 to ₹6 crores.

Sure. Can you call out what is the fee which you have generated let's say this quarter and the base quarter as well?

Just to get a sense,

okay,

is there any leverage there? Thanks.

What's that? Sorry?

The management fee.

That details, we normally don't disclose that separately. It's not at this moment.

Sure. That's all from my side.

Thanks a lot.

Thank you. Cheers.

Thanks, Rajiv. Friends, anyone with a question, please raise your hand.

Amit, Amit Agarwal, please unmute yourself and go ahead. Amit, do you have a follow-up question?

Friends, anyone with a question, request you to please raise your hand. Vaibhav has a follow-up question.

Vaibhav, please unmute yourself.

Hi. Thanks for the follow-up.

I just had a question regarding our F&B revenue for the quarter. If I do a quick maths, our room revenue is growing at a healthy pace of in the high teens, while our flight catering business has also done very well.

That translates to slightly negative revenue growth or revenue decline for F&B and other income streams. Is that a correct presumption?

What is the outlook for F&B and other income growing going forward?

If I look at the quarter, actually our F&B revenue also had increased versus last year. There's no degrowth.

Again, I would say when you dissect, you have to take out the element of the Rajgarh, which got impacted in Q1, which was not there last year. Otherwise, F&B revenue also had a healthy growth.

We almost recorded 6% to 7% growth on F&B.

Just one correction, and again, if I've got this number wrong, please correct me. The write-off from renovations was, if I remember correctly, ₹7.5 crores.

Yeah. We can take that.

That's fine.

Yeah.

I think you gave a slightly lower number.

Okay.

All right. Just second question on our operating inventory for Q1 on account of renovation.

How much was the impact on the operational inventory? Going forward, especially in Q2, is there any significant impact on operational inventory due to renovation?

In fact, we'll be in South Bombay, we'll finish the four floors, 120 keys, 1 month ahead of schedule. Instead of finishing in October, we'll finish in September.

We're ahead of time for that. We're also doing one floor at a time in Bombay at the Oberoi, Mumbai, and we now in Q2 are also doing rooms at the Oberoi, Bangalore, 18 rooms at a time, and a further 57 rooms at Trident, Bandra Kurla.

All of these will be finished before October.

Most of these renovations are happening in the summertime when our occupancy is low so that it has a minimum impact on the revenue and the profitability. Perfect.

Perfectly understood. Thank you.

Thank you. Friends, anyone with a question, please raise your hand.

One second, Rajiv has a follow-up question. Rajiv, go ahead.

Yeah. Thanks for the follow-up.

Just on the employee cost line item both in Q4 and Q1, is it safe to assume that this delta which we are seeing sequentially, let's say Q4 from Q3, ₹50, ₹60 crores is from Rajgarh alone? Is that the employee cost that's asset?

Rajeev, employee costs at Rajgarh are not at that number, Rajiv.

Rajiv, the employee cost has impacts of increase in headcount versus last year, including increments, including the wage impact, the labor court impact which we have taken this year. Also there's a impact of Oberoi Rajgarh coming into place, but not all increase attributable to Oberoi Rajgarh.

Is it possible to quantify the revenue contribution from Rajgarh this quarter? Or did I miss that?

Have you already called it out?

Rajiv, you are dissecting our P&L in detail. We'll not be able to give that detail.

I like the question, Rajiv. That's a good question.

Thank you. One thing that I will say about our industry is that people in our industry work very long hours.

If we want to attract good people to our industry and to retain good people and see them grow within the industry, which is important for the future of our industry, we really need to be more mindful of how many hours people are spending at work. At EIH and at our group companies, we've really made that commitment to reducing the number of hours that people work.

It's really including their breaks, etc. We really need to conform to the working hours limits which is not something that if you go and ask people working in our business frontline staff in hotels how many hours they work, they work very, very long hours.

Attrition therefore is high. Recruitment costs are high.

Training costs are high. The quality of service therefore suffers.

We've taken a conscious decision to really address this for all our colleagues within the company and that has an impact on higher costs as well.

Sure. Just last question on the delay which we have seen especially in Grand, does it lead to let's say cost overruns also in terms of what we were budgeting earlier?

Is there escalation on that number as well?

I think delays will have some cost and I'm not talking about the Oberoi Grand, but I'm just saying if you ask the question, do delays have an impact on higher costs? Yes, they do have some impact.

Depending on what the reasons for the delays are, that may be small or it could be larger. Delays do have an impact, and there's a second impact, which is more significant when they're delays, is that your ability to go to market gets delayed, and therefore your ability to earn revenue and drive profitability gets delayed.

That's all from my side. Thanks a lot.

Thank you.

Thanks, Rajiv. Friends, anyone with a question, please raise your hand.

No one? I'd like to hand over the webinar back to Vikram for his closing remarks.

Vikram?

Really nothing too elaborate, Navin. I just wanted to thank everybody.

We continue to do the very best we can. We're excited about the new openings, in particular, Hebbal.

Hebbal presents a great opportunity just because of the scale of that development and the EBITDA that it will generate for the company with two hotels and a mixed-use development or commercial development of over 1.3 million square feet. Goa is another location which we should really be in, and also our other hotel developments, both owned and managed.

We're excited about the growth. I'm confident we will have future news to share with you on our future growth with other opportunities coming to fruition in the not-too-distant future.

We remain optimistic about the future.

Thanks, Vikram. Vineet, anything from your end?

No, nothing to add.

Thank you very much. On behalf of SKP Securities, thank you very much, Mr.

Oberoi and Mr. Kapur, for taking time out to interact with the investors, and we look forward to hosting you again in the next quarterly webinar.

Thank you very much. Thank you, ladies and gentlemen, and have a wonderful day.

Thank you, Naveen.

Thank you. Thank you, Naveen.

Thanks a lot. Thank you.

Bye. Thank you.

Thank you. Thanks.

Goodbye. Bye.