KOLKATA: The closure of The Oberoi hotel in New Delhi for renovation since April 1 this year has dented the first quarter results of EIH Ltd. as it reported a post-tax loss of ₹12.3 crore against a ₹21.2 crore loss in the same period last year.
The total revenue for the first quarter was Rs. 278.9 crore, reports The Hindu.
After its renovation by April 2018, the 283-room hotel will become profitable and be among the best hotels in India, EIH Chairman P. R.S. Oberoi said at a press meet. “The 1965 vintage hotel needed extensive work to protect against the risk of declining market share and to ensure a future leadership position in the national capital,” Mr. Oberoi told shareholders at the Annual General Meeting. Asset write-off at The Oberoi, New Delhi, impacted profitability by ₹18.4 crore in the first quarter and additional write-offs are expected this quarter, he said, assuring shareholders that the company was optimistic of improving its revenue and profitability to partly offset this revenue loss.
Vice-chairman S.S. Mukherjee said this was the first time that the group had shut down a property for renovation. Its hotel in Mumbai had had a forced shutdown after the 26/11 terrorist attacks and needed a ₹180-crore makeover.
On the impact of room-aggregators and online market places, Vikram Oberoi, CEO and managing director, said, “Disruptive business models are not affecting our businesses now. But we will continue to pay attention on these.” He added that it would be wrong, however, to say there would be zero-impact in future.