Carrying the legacy forward
Dear Shareholders,
The year 2023 stood out as a time of triumphs and tests. While we strengthened our
resolve, we also grappled with the loss of our Chairman Emeritus, Mr. Prithvi Raj Singh
Oberoi. His visionary leadership and transformative contributions continue to be our
guiding lights.
The solid foundations he established are the bedrock of our success today.
Mr. P.R.S. Oberoi redefined the concept of luxury, not only for us but for the entire
hospitality sector in the subcontinent, placing India on the global stage. Embracing his
vision and values, we continue to strive for excellence in our upcoming endeavours. We
believe, as he did, that people are the most valuable asset of any organisation. With this
principle at heart, we continue to nurture ourteam and uphold these high standards.
GLOBAL LANDSCAPE
In 2023, the global economy showed resilience despite ongoing conflicts. As the year
unfolded, the world sustained growth, assisted by receding inflation, increased
investment, technological advancements and supportive fiscal policies. This was supported
by employment and income growth due to higher government spending and household
consumption. However, there exist risks from potential geopolitical tensions, regional
conflicts, I slower-than-expected deceleration in core inflation and persistently high
interest rates.
THE INDIA STORY
India's growth story stayed steady this year. We climbed the ranks to become the
world's fifth-largest economy by nominal GDP and third-largest by purchasing power parity.
India grew at a rate of 7.6% during the year, up from 7.0% in FY 2022-23, with consumption
growing at a modest 3 percent. Significant focus has been placed on infrastructure
investment which is a crucial driver of overa economic growth. Initiatives like the
National Infrastructure Pipeline (NIP), introduced in 2019, emphasise projects in energy,
roads, railways and urban development worth ? 11.11 Lakh Crores.
The year ahead looks promising, with the Reserve Bank of India (RBI) forecasting
momentum in manufacturing and services sectors, strengthened private consumption, rising
discretionary spending and improved income levels. Credit growth and private investment
are expected to rise, fuellec by optimistic business and consumer sentiments. Robust
corporate and bank balance sheets are also prompting renewed confidence in private capital
expenditure.
RESURGENCE OF THE INDIAN HOSPITALITY SECTOR
With the global hospitality industry continuing to grow, international tourist arrivals
are on the rise, indicating a strong demand for quality hospitality services. This trend
holds for the Indian hospitality and tourism sectors, which have experienced a significant
increase in international arrivals.
The Indian government has extended its support through several initiatives, including
easing visa restrictions, providing financial aid, and launching promotiona campaigns such
as 'Swadesh Darshan' and 'Dekho Apna Desh'to improve tourism infrastructure and
accessibility. The electronic visa system now covers almost every country, boosting
tourism further.
The domestic hospitality industry anticipates an exceptional period as premium hotel
occupancy rates are expected to reach decadal highs of 70-72% in FY 2023-24 and FY
2024-25, with Average Room Rates (ARRs) rising to 77,200-7,400 in FY 2023-24 and
77,800-8,000 in FY 2024-25. Digitisation has played a pivotal role in the industry's
recovery with technology adoption, including contactless check-ins and digital payments.
The sector's future looks bright, driven by improved connectivity, increasing
middle-income households, demand for premium products and services and the rise of niche
tourism segments of wildlife, spirituality and the ever growing wedding segment. Ongoing
infrastructure projects and a rise in demand suggest a long, sustained growth period for
Indian hospitality, with branded rooms' demand outpacing supply.
With a distinctive and impressive collection of hotels, resorts and cruisers, we are
poised to capitalise on India's burgeoning luxury market. Our reputation for delivering
superior quality and unforgettable experiences for our guests, combined with strong
returns for our shareholders, will enable us to achieve continued success in the sector.
SUSTAINABILITY
As a leader in the Indian hospitality industry, we take pride in collaborating with
leading consultants to develop sustainability targets that will drive improvements across
ESG metrics, through initiatives such as energy recovery systems and renewable energy use.
We have created a safe and encouraging environment for our employees to ensure their
personal and professional development. Furthermore, our engagement with charitable causes
across the country has led to numerous tangible outcomes, generating positive results for
local communities. Guided by our governance framework, we ensure continuous stakeholder
engagement and long term success by promoting responsible practices and inclusive decision
making.
I would like to express my sincerest gratitude to every member of our organisation for
their dedication and commitment to the pursuit excellence. Our efforts have delivered an
exceptional and authentic hospitality experience for our guests that is synonymous with
our company's unique history and reputation. With India's thriving economy presenting a
promising backdrop for our expansion, our company is well placed to achieve growth,
success and leadership as a premium hospitality player.
Thank you for your continued support and trust.
Yours sincerely,
Arjun Singh Oberoi