Interestingly enough, operating revenues at Indian Hotels have increased a mere 4.57 per cent to Rs 131.53 crore. This, analysts state, gives no clear indication of any increase in tourist or business arrivals. Giving credence to this line of thought, is the fact that Indian Hotels had posted a revenue growth of a mere 3.17 per cent for the year ended March, 1998. However, what this could mean is that an aggressive marketing, made more attractive by hefty discounts is helping entice domestic tourists and thus paying some dividends.

But while revenue growth has been almost stagnant, the company hasmanaged to post buoyant operating margins which improved from 24.23 per cent to 27.26 per cent. These are incidentally in stark contrast to the drop in margins from 37.57 per cent to 32.39 per cent for the year ended March, 1998. Stringent cost control and prudent working capital management seems to have helped Indian Hotels. However, it is important here to mention that expenditure last year has been disproportionately bloated on account of a wage settlement and increased power tariffs, the effects of which would also be felt during the course of the year. Aided by a containment of the interest and depreciation charges, net profit improved by 6.08 per cent at Rs 24 crore.

However this improvement in the bottomline cannot be construed in anyway as a revival of sorts. Especially since a lot of hotel companies are planning new room additions, which will only lead to excess capacity.