Skift Travel News Blog

Tata Group-backed Indian Hotels Company (IHCL) reported what Puneet Chhatwal, its managing director and CEO, called the best first quarter in the company’s history.

The hotel brand reported strong free cash flows of almost $25 million and net cash positive of $33 million in its consolidated and standalone financials for the first quarter ending June 30, 2022.

A surge in demand across markets and segments, with occupancy and rates exceeding pre-Covid levels and backed by an asset-light model, Indian Hotels Company achieved a milestone earnings before interest, taxes, depreciation, and amortization of $51 million, compared to a loss of $15.5 million in the same quarter last year, said Chhatwal.

The company reported a profit after tax of $21 million against only $750,000 in 2019-20.

“The trend is very positive in India and we have outperformed in almost every market on the domestic front, except for a marginal lag in Rajasthan,” Chhatwal said.

With revenue per available room levels exceeding that of the first quarter of 2019-20 in Indian metropolitan cities, Chhatwal, said, “The cities of Mumbai, Bengaluru and New Delhi are back.”

Mumbai Bengaluru and Delhi are also important for the hotel brand as it has owned or licensed assets in these cities. “We account for those revenues and a change in the revenue numbers has a significant impact on our portfolio and our performance,” Chhatwal said.

The company has signed 10 new hotels in the first quarter, with three hotels each under the Taj and Ginger brands, and two hotels each under the SeleQtions and Vivanta brands, and expects to sign 15 more for the rest of the year.

With its presence in over 100 locations in India, Indian Hotels Company has further strengthened its pan-India footprint with the opening of four new hotels in the current fiscal.

“So our pan India footprint is stronger and is getting even further stronger as each month and each quarter goes by through our aggressive asset-light growth strategy that has been in place,” Chhatwal said, adding that the asset-light model is not only driving growth, but is also helping the brand find the right balance which is in line with its Ahvaan 2025 strategy.

Even as IHCL is getting ready to launch a new website and a new mobile app, the hospitality brand is clear that the backbone of the company was, is and in the foreseeable future remains the Taj.

“We are very clear that all brands associated directly or indirectly with the Taj are perceived as premium brands in their respective segment,” Chhatwal said during the first quarter earnings call.

“One thing which we have been very careful about in the last few years is the premiumization of our portfolio. Any business that we enter in we want our offering to be in the premium level in their relative positioning.”

The company’s long-term growth will also focus significantly on digital enablers such as the super app — Tata Neu. “The Tat Neu integration has enabled us to get one million new members in four months and a 50 percent growth in our loyalty base,” Chhatwal said.

Norwegian Cruise Line Holdings Ltd reported a net loss of $509.3 million for the second quarter of this year, as the company benefits from relaxed Covid protocols and navigates through inflation and higher fuel costs. The company reported a reported a net loss of $1 billion in the last quarter.

Revenue was $1.2 billion, up from $4.4 million in the second quarter of 2021. Onboard revenue has risen over 30 percent from the same quarter in 2019. Load factor was 65 percent, up from 48 percent from in the last quarter.

Total cruise operating expenses rose year over year. Inflation and continued Covid-19-related costs including testing were major contributors. Fuel prices per metric ton rose to $836, up from the second quarter of $673 in 2021. The impact of the labor shortage has been limited to Norwegian Cruise’s U.S. operations, according to Norwegian Cruise President & CEO Frank Del Rio.

Looking ahead, Norwegian’s advance ticket sales balance rose $0.3 billion in the quarter to $2.5 billion, an all-time record high for the company. Sales for 2023 tickets are 40 percent higher than they were in 2018 for 2019 tickets, according to Del Rio.

Recent events are boosting the cruise line’s recovery in the months ahead. Del Rio cited President Joe Biden lifting the testing requirement for incoming travelers, the Center for Disease Control retiring its Covid outbreak tracking program for cruise ships and Norwegian Cruise’s recent protocol relaxation around vaccination and testing requirements. “Each one had a positive impact on booking,” he said. “Each of those events triggered an improvement in bookings.” 

The company expects a net loss for the next quarter due to the effects of the Russia-Ukraine conflict and current macroeconomic conditions.

Inspirato, a Denver-based travel startup, said that it generated $36 million in subscription travel revenue in the second quarter — up by half year-over-year. The company’s full quarterly revenue was $84 million. 

The company’s Netflix-like subscription service, Inspirato Pass, had 3,600 subscribers in the quarter. For about $2,500 a month, Inspirato’s Pass lets travelers stay at about luxury vacation homes and hotels it partners with for specified lengths of stay.

In a concerning sign, growth in the company’s longstanding club-based program — Inspirato Club, where people pay a fee for access to discounted travel — grew only 4 percent to 12,100, year-over-year.

In another eyebrow-raising statistic, losses increased instead of shrunk. The net loss for the second quarter of 2022 was $7.2 million compared to a net loss of $0.6 million in the second quarter of 2021. Management attributed the rising losses to “increased corporate operating expenses.”

The company said it forecast that its loss for the full year will be between $15 million and $25 million on an adjusted earnings before interest, taxes, depreciation, and amortization basis. The company anticipates generating positive adjusted earnings for the full year 2023.

Australia’s Flight Centre Travel Group has finally turned a corner, and on Monday updated its 2022 fiscal year market guidance after seeing a “solid rebound” in travel demand.

The Australian based travel giant now predicts it will report a “healthy” fourth-quarter profit, for the three months up to June 30, 2022, on an underlying earnings before interest, taxes, depreciation, and amortization (or EBITDA) basis.

It also aims to break even in its second half, or the six months up to June 30, 2022.

The update comes ahead of its full-year results being published on August 25.

The group took drastic steps early on during the pandemic, closing some 800 retail stores in April 2020. Some 40 percent of those closures involved agencies based in Australia.

“The scale of our recovery exceeded our initial expectations and meant that we should now exceed our preliminary full-year 2022 result target, with early trading results pointing to a breakeven second-half result and a healthy fourth quarter profit,” said managing director Graham Turner in a statement on Monday.

However, it said it expects to report a full-year loss of between $125 million and $132 million for the 12 months to June 30, 2022.

Overall, this would represents an 11.9 percent improvement on its initial 2022 market guidance

In 2021, it made a loss of $234 million.

Total transaction value for the year topped nearly $7 billion, more than two-and-a-half times seen in 2021, the company added, fueled by an uplift in demand and higher than normal ticket prices linked to a lack of airline capacity, particularly on international routes.