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, 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 overal economic growth. Initiatives
like the National Infrastructure Pipeline (NIP), introduced in 2019, emphasise projects in
energy, roads, railways and urban development worth 711.11 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, fuelled 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