ITC hotels' business registers flat growth

BANGALORE: Kolkata-based conglomerate, ITC Group's, hotel revenues disappointed with flat sales at Rs 2.3 billion due to a weak global economic situation, which led to lower foreign tourist arrival, says brokerage firm Motilal Oswal.

"We expect hotels growth momentum to be moderate. Recovery in the industry is only expected to be gradual. Increasing supply in the hospitality industry kept occupancies and average room rates flat which led to a difficult quarter," says the brokerage.

The company hotel division's EBITA margin also contracted 1100bp to 11.3 per cent, largely due to weak global economic environment and slowdown in domestic economy.

ITC, through a subsidiary, WelcomHotels Lanka, has acquired a prime plot in Colombo on a 99-year lease from the government of Sri Lanka for developing a 5-star luxury property. The project is expected to cost $300 million to the company. It is also setting up hotel in Kolkata and Gurgaon.

ITC has interest in businesses spanning from hotels, consumers goods, IT and agriculture.