India's hospitality sector has witnessed a fall of 64 percent in profit in the January-March quarter this year, thanks to the economic slowdown, an industry lobby report said here Thursday.
"While on the one hand the inflow of foreign tourists came down sharply and the room rates contracted, on the other hand there was a rise in expenses," the report by the Associated Chamber of Commerce and Industry (Assocham) said.
According to D.S. Rawat, secretary general of Assocham, the borrowing cost of the hotels went up 51.65 percent in the fourth quarter, while the total income decreased 4.47 percent.
The chamber said it had prepared the report by analysing the quarterly results of the hotel companies listed on the Bombay Stock Exchange (BSE) between April 1 and May 25 2009.
TAJ GVK Hotels and Resorts, a leading player in the industry, has suffered 41.49 percent quarter-on-quarter fall in net profit during January-March 2009, while Jaypee Hotels has posted a decline of 44.86 percent in profit during the period.
Other hotels that registered major decline in net profit were Oriental Hotels (28.34 percent), Jindal Hotel (58.12 percent) and Howard Hotels (57.28 percent).
Besides the decline in income, these hotels also had to cope with a 20 percent hike in costs during the period.
The maximum rise in expenses was incurred by Asian Hotels (11.57 percent), followed by Jaypee (10.85 percent) and TAJ GVK (8.3 percent), the report said.
The employee cost of these hotels rose 7.47 percent per worker in the fourth quarter, while the cost of power, fuel and light went up 11.28 percent.