Reopening of Oberoi in Delhi to reflect positively in EIH Q4 numbers

Exec chairman P R S Oberoi told shareholders that GST would impact travellers negatively

The iconic Oberoi, New Delhi, that was closed for renovation, since April 1, 2016, will reopen ahead of schedule, in January 2018.
 

The renovation—that cost a whopping Rs 500 crore—will reflect positively in the company's fourth quarter earnings.

"The Oberoi, New Delhi, was originally scheduled to open in early April, 2018 after complete renovation. The progress on the site has been very satisfactory and the new hotel is likely to open in January 2018. The Oberoi, New Delhi, is expected to retain its iconic position in the capital which it has since it first opened in the year 1965," P R S Oberoi, executive chairman of EIH Limited, said at the company's annual general meeting.

The tariff of the refurbished Oberoi would be much higher. The hotel would house 218 guest rooms, including 32 suites. The rooms will be bigger with spacious bathrooms affording beautiful views. The suites will have Art Deco and Victorian themes. Earlier, the Oberoi used to have 283 guest rooms, including 17 suites.

The Oberoi, New Delhi, has been designed by renowned interior designer, Adam Tihany, who has drawn inspiration from Edwin Lutyen in designing the hotel.

To compensate for the quality of air in the New Delhi, the hotel will have high efficiency advanced air filters to provide clean air at par with global best standards.

"The earlier than expected opening of The Oberoi, New Delhi, in January, 2018, will further contribute to the revenue and profitability of the company," Oberoi said.

Around 10 years back, The Oberoi, New Delhi, used to contribute around Rs 95 crore of profits. But it kept coming down as the property became outdated.

In the first quarter, EIH, posted total revenues of Rs 303 crore as against Rs 279 crore last year. Profit after tax was at Rs 11 crore compared to a loss of Rs 12 crore last year.

However, Oberoi told shareholders that GST would impact travellers negatively. Hotels charging over Rs 7,500 would attract 28 per cent GST.

S S Mukherji's, executive vice chairman, EIH, later explained that the tax rates were around 19 to 20 per cent. "So customers would have to pay more, but how much it would impact the company's revenues, would be difficult to say at the moment," he said.