MUMBAI Regional hotel operator Kamat Hotels India Ltd. is in growth mode, and CFO Kurian Chandy is optimistic that the company will continue to see improving performance metrics.
In an interview with CNBC-TV18, Chandy discusses the latest happenings in his company and sector.
Chandy expects to see average daily rate and occupancy rates continue to rise in India into early 2011. Both measures are up in the fourth quarter, by 15% and 10%, respectively. “This quarter and the next quarter is normally a very good quarter for the hotel industry,” he says. “Likewise, we have seen good jump on the average room rents, as well as on the occupancies as well, which will definitely show in the results for this coming quarter.
“Going by what is happening in the last six to nine months, we are very confident that the ARRs will definitely be going higher. Occupancies have helped us to take the ARRs higher. In the coming quarter, as well, we see that we will post better revenue numbers.”
Kamat’s debt-to-equity ratio is about 5:2, and the company is taking some steps to reduce that, Chandy says. The objective going forward is to reduce the debt to 1.5:1. “We had negotiated with the foreign currency convertible bond-holders and got them to mandatedly convert the FCCB bonds. Before the conversion, the debt on Kamat Hotels India Ltd. as a standalone was close to 1.9:1. After the FCCB is converted completely, it will come to 1.05:1.
Kamat, which has about 1,500 guestrooms in operation, plans to open a 400-key property in Pune by late next year, Chandy says.