espire hospitality ltd share price Management discussions


EHL is very much endavour to establish its footprints in the Hotel Industry to provide ultra-luxury and guest friendly stay at its hotels and resorts

Industry structure & developments

Global Economics

Despite geopolitical tensions, the year 2022 commenced with a mixed outlook. While there were concerns of potential flat growth, the global economy faced unforeseen challenges such as supply chain disruptions, monetary tightening, inflation and recessionary fears.

China experienced a temporary decline in growth during the fourth quarter of 2022 due to a surge in COVID-19 cases following the relaxation of restrictions. Additionally, the global inflation rate reached 8.7% in 2022, largely driven by supply chain disruptions caused by the ongoing pandemic and the Russia-Ukraine conflict.

The effects of the Russia-Ukraine conflict also had spill over effects on Europe, with the region grappling with acute energy shortages. This, coupled with the implementation of Brexit, impacted various aspects of Europe, including immigration, trade and tourism. The UK economy experienced a slowing growth rate as a direct consequence of these factors.

The global economic landscape in 2022 was marked by a combination of both optimistic and challenging factors, requiring careful analysis and evaluation.

According to the International Monetary Fund (IMF), the global economy experienced a GDP growth rate of 3.4% in 2022, which was lower compared to the previous years growth rate of 6.1%. Despite this moderation, there were notable developments in the tourism sector, with international tourist arrivals rebounding to reach 63% of pre-pandemic levels. Particularly, the Middle East and Europe exhibited robust recovery in this aspect, reflecting positive trends in the tourism Industry.

Indian Economics

Indian Hospitality and Tourism Sector

Indias hospitality and tourism sector experienced a notable resurgence in 2022, marking its strongest performance since the pandemic began. Known for its rich cultural heritage, India remained a popular destination for global travellers, leading to a thriving tourism and hospitality industry. The demand for accommodations saw a significant increase, driven by domestic leisure travel, weddings, social events, conferences and business trips.

The Indian governments permission for 100% Foreign Direct Investment (FDI) in the hotel and tourism industry attracted substantial investments, reflecting its significance in the economy. From April 2000 to September 2022, the hospitality sector accounted for 2.6% of total investments in India, highlighting its contribution. The sectors growth has been fuelled by rising investor interest and active participation from domestic companies, driving expansion and investment activities.

Furthermore, international recognition and acceptance of Indian hotel chains have enhanced their reputation and visibility, enabling them to meet if not exceed global expectations with elevated service standards. This has further strengthened the sectors performance, positioning In dian hotel chains as dependable choices for discerning travellers worldwide.

Overall, the rejuvenation of Indias hospitality and tourism sector demonstrates its resilience and adaptability. With a positive outlook and ongoing investments, the industry is poised for sustained growth and continued success in the future.

Despite encountering initial challenges at the beginning of the year due to the emergence of the third wave of COVID-19, the hospitality sector experienced a significant recovery starting from the second quarter of 2022, demonstrating a consistent upward growth trend.

The Ministry of Tourism has been allocated a budget of US$ 2.1 billion in the 2023-24 fiscal year, with a substantial portion dedicated to enhancing the tourism industry and infrastructure in India.. Under the Union Budget 2023-24 , an outlay of US$ 170.85 Million has been allocated for the Swadesh Darshan Scheme , further 68 destinations/sites have been identified in 30 states/UTs for development under the PRASHAD scheme as on 31st March, 2022

FINANCIAL AND OPERATING PERFORMANCE

The fiscal year 2022-23 is the milestone year for the company, as the company pushed up into the Hotel Industry with full force and all resources. After commencing the operations of its first Hotel in the month of November,2021 during the year under report the company has signed various agreements for taking over various hotels on Lease basis, Management right basis, granting of brand name basis etc.

There was month on month progress achieved by the company

APRIL,2022 - In this month the company starts getting revenue from Country Inn Hall of Heritage Amritsar, a Hotel under Management Agreement .

JUNE,22- In this month the company takes on lease the Hotel at Bhimtal as well as the Hotel at Jim Corbett from the Group Companies namely Forest Fern Hospitality Private Limited & Forest Fern Resorts Private Limited and get the same operational w.e.f 1st July,2022

AUG,22- In this month the company opened up its first ZANA brand hotel in Udaipur under the name and style "Zana Luxury Escape- Udaipur" the hotel is situated at the bank of Udaisagar Lake , on revenue share basis

DEC,22 In this month the company opened up its beach resort namely "Country Inn Tarika Verca Beach" at Varca Beach Goa, on revenue share basis.

In between the company opened up its Country Inn Express Sajjjangarh at Sajjangarh, and had signed various agreements, Letter of Intents for the hotels at Vrindavan, Kosi, Mussoorie, Chail, Dehradun, Raipur, Patkot, Rishikesh ,

FUTURE PROSPECTS

In its continuous endeavor towards the upliftment of its Shareholder wealth the Company is looking forward for entering into new ventures by taking various hotels on lease/management/ branding basis as of now following hotels are running under the umbrella of ESPIRE HOSPITALITY:-

? Country Inn Bhimtal , Bhimtal, Uttarakhand

? Country Inn Riverside -Tarika, Jim Corbett, Ramnagar Uttarakhand

? Zana Luxury Escapes, Udaipur

? Country Inn Hall of Heritage, Amritsar

? Country Inn Tarika Goa , Varca Beach

? Country Inn Resorts, Vrindavan

? Country Inn Mapel Resorts Chail,

? Country Inn Premier Pacific Resort, Mussoorie

? Country Inn Premier- The Prominance Dehradun.

Companys upcoming Hotels/ Resorts are at Ranthambore, Raipur, Kasauli , Rishikesh Risk & Concerns

There are various risks associated with Hospitality sector. The major risk is of the ongoing changing customer behavior. Changing in climates is also a matter of concern, floods, landslides plays a major role. Availability of trained staff, since hospitality sector is a personalized sector wherein every guest wants the satisfaction of services as per his/her own way and manner, accordingly the deployment of appropriate human resources is also a matter of concern and risk. Appropriate and timely availability of the raw materials is also a major factor as in all locations all types of vegetables/fruits and other raw materials are not available, which in fact added the procurement cost from other locations.

Segment -wise or product wise performance

The company deals in only one segment namely hotel and resorts, accordingly the requirements of Ind AS-108,are not applicable .

Internal Control Systems & their adequacy

The company has placed adequate and effective system of internal controls, which are wisely commensurate with the nature of business and its scale of operations. Reviews of the audit plans, significant audit findings, adequacy of internal controls, compliance with accounting standards including any changes in that is a regular course of action of the companys Audit committee. The Statutory Auditors of the Company have also, in their report to members for the financial year ended on 31st March 2023, confirmed the adequacy of internal control system of the Company.

Discussion on financial performance with respect to operational performance

The Financial Statement for the financial year ended on 31st March, 2023 have been prepared in compliance of the provisions of the Companies Act, 2013 and applicable Indian Accounting Standards issued by the Institute of Chartered Accountants of India (Ind AS). The Board of Directors accepts the integrity and objectives of these financial statements.

During the year under report, your company has recorded revenue of Rs 1883.30 Lacs in financial year 2022-23 as compared to Rs 230.75 Lacs in financial year 2021-22. The Company has incurred a net profit of Rs. 28.24 Lacs as compared to net loss of Rs 7.84 Lacs recorded in the last financial year.

Material Development in Human Resources

At ESPIRE HOSPITALITY, human resources are considered as the prime assets, they have been treated with atmost care are caution. Since hospitality sector is a purely depends on the guests experience, at most care is being provided to the staff for delivering their best. Friendly working environment, attractive remunerations, moral boosting activities , accommodation , transportation etc. are some of the measures the HUMAN RESOURCE team use to apply to strengthen the Human Resources in the organization.

For and on behalf of the Board of Directors
New Delhi Managing Director: Prithvi Raj Singh
Date: 06/09/2023 Din: 02876176