Roopshri Resorts Ltd Management Discussions

INDUSTRY STRUCTURE, DEVELOPMENTS: Global Economic Overview:

The global tourism industry continued its strong resurgence in 2024, nearly achieving full recovery from the pandemics impact. Strong post-pandemic demand, solid performance from major source markets, and Asia-Pacific destinations getting back on track fueled this comeback. According to the UNWTO Barometer January 2025, international tourist arrivals hit around 1.4 billion in 2024 an 11% jump from 2023 and basically back to pre-pandemic levels (99%). Europe was the top-visited region (52% share), racking up over 747 million arrivals (+5% vs 2023), slightly beating 2019 numbers. The Americas saw 214 million travelers (+7% vs 2023), hitting 97% of pre-pandemic levels. The Middle East grew 1% over 2023 but crushed 2019 numbers by 32%. Africa beat pre-pandemic levels by 7% and grew 12% vs 2023.

The global tourism and hospitality sector is set for continued growth in 2025, after fully recovering from the pandemic last year. According to the United Nations World Tourism Organization (UNWTO), international tourist arrivals are expected to rise by 3% to 5% compared to 2024. This indicates a normalization of growth after the sharp post-pandemic rebound. Industry confidence is high UNWTOs January 2025 Confidence Index shows 64% of travel professionals expect a stronger performance in 2025 than in 2024. Enhanced air connectivity and simplified visa processes are key factors fueling this optimism.

The World Travel & Tourism Council (WTTC) forecasts that 2025 will be a landmark year for the industry. The sectors global economic contribution is expected to hit a record-breaking $11.7 trillion up from $10.9 trillion in 2023 and $10.3 trillion in 2019. Thats a 6.7% bump from last year and a 13% jump compared to pre-pandemic levels. Plus, travel and tourism are on track to support 371 million jobs globally in 2025, surpassing pre-pandemic employment levels.

However, the industry continues to face external risks, including trade tensions and geopolitical instability, which may influence travellers behaviour and discretionary spending potential. Travellers are expected to prioritise value-driven options and intra-regional trips. According to CBREs 2025 Global Hotel Outlook, the Asia-Pacific region is set to experience modest revenue per available room (RevPAR) growth, fuelled by rising wealth and demand that is outpacing relatively slow new supply.

International Tourist Arrivals by Region

	Share International arrivals (minion]
Region	2024	2024	2023	2019	Change \ 2024/2023	\ Level achieved 2024 VS 2019
World	100.0	1,445	1,305	1,465	11%	99%
Eunce-r	51.7	747	70S	742	5%	100%
Asia and the Pacific	21.9	316	238	363	33%	S7%
America i	14.7	214	200	219	7%.	97%
Middle East	6.6	95	94	72	1%	132%
Africa	5.1	74	66	69	12%	107%

Indian Tourism & Hospitality Sector:

Indias economic outlook for FY 2025-26 looks optimistic, backed by strong domestic fundamentals and supportive policies. According to the Reserve Bank of India (RBI), real GDP growth is projected at 6.5% for FY 2025-26. India is one of the fastest-growing large economies globally, driven by favorable demographics and a robust, consumer-oriented domestic market. The Reserve Bank of India (RBI), in its April 2025 Monetary Policy Statement, projects real GDP growth at 6.5% for FY 2025 26. The governments continued focus on infrastructure, clean energy transition, and digital public infrastructure is poised to drive medium-term growth. However, risks remain from global trade owing to rising protectionist measures, persistent geopolitical tensions, rising supply chain pressures, and volatile global financial conditions.

The outlook for FY 2024-25 remains optimistic. Indias per capita income is likely to grow by nearly 70 to US$4,000 by FY 30 from US$2,450 in FY 23. The Reserve Bank of India (RBI) anticipates sustained momentum in manufacturing and robust growth in the services sector, surpassing pre-pandemic levels. Agricultural activities are expected to benefit from a normal southwest monsoon. The RBIs consumer survey indicates that private consumption will likely strengthen, driven by increased rural activity and rising discretionary spending among urban households. Improving income levels and healthy corporate and bank balance sheets are expected to fuel credit growth and private investment, leading to an upturn in the private capex cycle. Core inflation is projected to continue its downward trend, reflecting a broad-based easing of price pressures.

Rising contribution to Indias GDP:

? Government initiatives, such as the 2047 Vision, aim to attract 100 million inbound tourists by 2047 The World Travel Tourism Council (WTC) forecasts that the sectors contribution to GDP will reach Rs 21 15 000 crore (US 250 2 billion) in CY 24 and could potentially grow to Rs 43 25 crore (US 511 5 million) by CY 34 supporting approximately 63 million jobs. ? The Indian travel and tourism industry is expected to record an annual growth of 7.1 per annum ? Tourism is the third largest foreign exchange earner for the country

Macro Review:

Tourism is a powerful driver of economic growth, serving as a significant source of employment and foreign exchange earnings in many countries, including India. It has the unique ability to generate large-scale employment across various skill levels, from highly specialized roles to unskilled labor, thereby playing a critical role in creating additional job opportunities. Moreover, tourism contributes to achieving growth that is both equitable and sustainable. Overall, Indias macroeconomic fundamentals remain robust, with a favourable outlook for investment, consumption, and employment in the coming fiscal year.

In the Hospitality Industry, delivering high-quality services to customers without compromising on standards is a complex challenge. In the face of rapid technological advancements and globalization, it is crucial for the industry to manage operations, marketing, and human resources effectively. The Hospitality Industry plays a vital role in global employment through its close ties to tourism, which remains one of the key revenue-generating sectors for many regions.

Roopshri Resorts Limited currently operates "Hotel Alexander" in Matheran, a well-known hill station in Maharashtra. Hotel Alexander is one of the oldest properties in Matheran, having been in operation for over three decades under this brand. Nestled on a secluded hillside, the property offers an ideal escape from the citys hustle and bustle.

Our company has been providing services to this hotel for several years and eventually took over the property on a leave and license basis from its owner. The hotel consists of 13 private cottage rooms and 12 executive rooms, but currently, only 4 private cottage rooms are operational. At present, the hotel offers only lodging facilities.

Our company plans to renovate the property, expand its operational capacity, and rebuild its boarding facilities to provide "full lodging and boarding services" to our guests. The hotels charm lies in its "heritage living with nature" experience, which does not require significant investment in state-of-the-art interiors, making it a value-for-money proposition.

SEGMENT-WISE OR PRODUCT-WISE PERFORMANCE

Roopshri Resorts Limited is primarily engaged in the business of hoteliering, which the management identifies as its sole business segment. The company operates under a unified approach, focusing all its resources and strategies on delivering exceptional hospitality services. This single-segment focus allows the company to streamline its operations, ensuring consistent quality and efficiency across all its properties. By concentrating on the hotel and resort sector, Roopshri Resorts Limited is able to leverage its expertise in hospitality management, optimize its service offerings, and maintain a strong brand presence in the market. This concentrated approach has enabled the company to effectively cater to the evolving needs of its guests, ensuring a high level of customer satisfaction and loyalty. As the company continues to enhance its properties and expand its offerings, this segment-wise focus remains central to driving growth and sustaining competitive advantage in the hospitality industry.

RISKS AND CONCERN:

Roopshri Resorts Limited operates within a dynamic and competitive hospitality industry, where the ability to effectively manage risks is crucial to sustaining growth and achieving strategic objectives. The companys risk management framework is designed to identify, assess, and mitigate risks, ensuring that they are adequately monitored and reported in a timely manner. This framework is regularly reviewed and updated to reflect the evolving business environment and the changing scale of the companys operations.

One of the primary challenges in the hospitality industry is the constant pressure to meet and exceed customer expectations in terms of service quality. This is compounded by the need to balance the inventory of resorts with the growing demand from customers. Failure to maintain this balance can lead to customer dissatisfaction and negatively impact the companys reputation and revenue.

Attracting, retaining, and motivating skilled personnel, particularly managerial talent, is another significant risk. In a high-growth industry characterized by intense competition, the ability to maintain a strong and motivated workforce is critical to the success of Roopshri Resorts Limited. The companys performance could be adversely affected if it fails to secure and retain the necessary talent to drive operations and execute its strategic plans.

The hotel industry is also vulnerable to changes in national and local economic conditions. Fluctuations in the economy can lead to decreased consumer spending on travel and accommodations, impacting occupancy rates and profitability. Additionally, the industry faces risks from changes in governmental regulations, which can influence wages, labor union activities, and other operational costs. Increases in land acquisition prices, construction costs, interest rates, and real estate taxes can further strain the companys financial resources and hinder its ability to develop new projects or expand existing operations.

Roopshri Resorts Limited recognizes that managing these risks is essential for maintaining operational efficiency and achieving its long-term goals. The companys proactive approach to risk management, which includes continuous monitoring and periodic reviews, helps to mitigate potential threats and positions the company to navigate the challenges of the hospitality industry successfully.

OPPORTUNITIES AND THREATS:

(A) OPPORTUNITIES

1. Tourism Growth:

The global rise in travel and tourism, particularly post-pandemic, presents a significant opportunity. Increased disposable incomes and a growing middle class in emerging markets are driving demand for both luxury and budget accommodations.

2. Government Support:

Many governments are actively promoting tourism through favorable policies, infrastructure development, and visa reforms. These initiatives create a conducive environment for growth in the hotels and resorts industry.

3. Technological Advancements:

The integration of advanced technologies such as AI, IoT, and big data analytics can enhance guest experiences, streamline operations, and optimize pricing strategies. This provides a competitive edge for hotels and resorts that leverage these technologies.

4. Sustainability Trends:

Growing awareness of environmental issues and sustainability is driving demand for eco-friendly accommodations. Hotels and resorts that adopt green practices and promote sustainability can attract environmentally conscious travelers and gain a strong market position.

5. Experiential Travel:

There is an increasing trend towards experiential travel, where guests seek unique and authentic experiences. Hotels and resorts can capitalize on this by offering curated experiences, cultural immersion, and personalized services.

6. Business Travel and Events:

With the return of in-person events, conferences, and business travel, there is a renewed demand for corporate stays and MICE (Meetings, Incentives, Conferences, and Exhibitions) facilities. This segment offers significant revenue potential.

7. Domestic Travel:

The rise of domestic tourism, driven by travel restrictions and changing consumer preferences, provides an opportunity for hotels and resorts to cater to local travelers. This trend is especially strong in regions where international travel remains limited.

(B) THREATS

1. Highly Competitive

The tourism industry has become very competitive. Many small businesses have jumped into it, and they offer low-quality service at high prices.

2. Economic Uncertainty:

The global economic environment remains volatile, with inflation, recession risks, and fluctuating exchange rates posing threats to the hotels and resorts industry. Economic downturns can lead to reduced discretionary spending on travel and accommodation.

3. Competition:

The industry faces intense competition from both traditional players and new entrants, including online travel agencies (OTAs), alternative accommodations like Airbnb, and boutique hotels. This competition can lead to pricing pressures and reduced margins.

4. Changing Consumer Preferences:

The preferences of travelers are evolving, with increasing demand for flexible booking options, enhanced hygiene standards, and digital services. Hotels and resorts that fail to adapt to these changing preferences may lose market share.

5. Operational Challenges:

The industry faces challenges such as labor shortages, rising operational costs, and supply chain disruptions. These factors can impact the quality of service, increase costs, and reduce profitability.

6. Regulatory Risks:

The industry is subject to stringent regulations regarding health and safety, labor laws, and environmental compliance. Any changes in these regulations or non-compliance can result in significant fines, legal challenges, and reputational damage.

7. Environmental Risks:

The industry is vulnerable to environmental risks such as climate change, natural disasters, and resource scarcity. These risks can lead to property damage, operational disruptions, and increased insurance costs.

8. Cybersecurity Threats:

As hotels and resorts increasingly adopt digital technologies, they become more vulnerable to cyberattacks and data breaches. A successful attack can lead to financial losses, regulatory penalties, and loss of customer trust.

BUSINESS PERFORMANCE:

The hotel and hospitality industry is currently navigating a period of unprecedented change, marked by significant trends that are reshaping its landscape. One of the most notable trends is the growing opportunity for expansion into new markets, driven by increasing global travel and tourism. As the industry continues to evolve, it is becoming increasingly intertwined with real estate, with properties being viewed not only as service providers but also as valuable assets. This transformation presents both challenges and opportunities for businesses like Roopshri Resorts Limited.

In this dynamic environment, staying ahead of emerging trends and understanding the evolving needs and demands of travelers is critical. The ability to anticipate and respond to these changes will determine the companys success in a highly competitive market. As travelers seek more personalized and unique experiences, Roopshri Resorts Limited is focused on enhancing its offerings to meet these expectations, ensuring that the company remains relevant and appealing to a broad spectrum of guests.

This period of change is also a time of unparalleled opportunity. By leveraging insights into consumer behavior and market trends, Roopshri Resorts Limited aims to position itself at the forefront of the industry. The companys commitment to understanding and adapting to the needs of todays travelers, while anticipating future demands, will be key to driving sustained business performance and long-term growth in the evolving hospitality sector.

FINANCIAL AND OPERATING PERFORMANCE:

The Total Income of the Company stood at Rs 206.38 lakhs for the year ended March 31, 2025, as against Rs 186.88 lakhs in the previous year. The Company made a net profit (after tax) of Rs. 45.12 lakhs for the year ended March 31, 2025, as compared to the net profit of Rs. 44.65 lakhs in the previous year.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:

The Company has institutionalised an adequate system of internal controls, with documented procedures covering all. Corporate functions and hotel operating units. Internal controls provide reasonable assurance regarding the effectiveness and efficiency of operations, the adequacy of safeguards for assets, the reliability of financial controls, and compliance with applicable laws and regulations.

The Companys internal controls are structured in a manner that ensures reasonable assurance with regard to recording and providing reliable financial and operational information, complying with applicable statutes, safeguarding assets from unauthorized use or losses, executing transactions with proper authorization, and ensuring compliance with corporate policies, laws, and accounting standards.

With a strong monitoring system in place, the Company has an Audit Committee, the details of which have been provided in the Corporate Governance Report. The Audit Committee of the Board of Directors reviews the existing audit procedures and internal systems of control on an ongoing basis, keeping in mind the organizations requirements, growth prospects, and ever-evolving business environment. They also review the internal audit findings and recommendations and ensure that corrective measures are implemented. Suggestions for improvement are considered, and the Audit Committee follows up on the implementation of corrective actions.

HUMAN RESOURCES:

Roopshri Resorts Limited is committed to achieving and sustaining leadership in the hospitality industry by delivering exceptional value to its customers. Central to this mission is the companys focus on rewarding and recognizing quality customer care, driven by both individual and team performance. The company believes that its employees are its greatest asset and therefore provides ample opportunities for continuous learning and development. By fostering a work environment grounded in fairness, Roopshri Resorts Limited ensures the well-being of its employees, the community, and the environment.

Significant improvements across all areas of the hotels have been realized through a clear understanding of the companys vision and philosophy, coupled with a flexible approach to Customer Relationship Management. To build a culture of trust and transparency, the company has initiated regular staff meetings where employees are briefed on new activities and the current business landscape. These meetings, combined with ongoing training programs, empower employees to stay informed and aligned with the companys goals, enhancing their ability to deliver outstanding service. Through these initiatives, Roopshri Resorts Limited continues to cultivate a motivated and skilled workforce, which is essential to achieving long-term success in the hospitality industry.

OUTLOOK:

As global travel continues to rebound, the demand for diverse and high-quality hospitality experiences is expected to rise. Roopshri Resorts Limited is well-positioned to capitalize on this trend by enhancing its service offerings, expanding into new markets, and leveraging its existing assets.

The company anticipates further integration of technology to improve guest experiences, streamline operations, and drive efficiency. Sustainability will also be a key focus, with an increasing emphasis on eco-friendly practices and responsible tourism to meet the growing demand for environmentally conscious travel options.

However, the industry must also navigate potential headwinds, including economic fluctuations, regulatory changes, and evolving consumer preferences. Roopshri Resorts Limited remains committed to adapting to these challenges by maintaining a flexible and resilient business model, investing in talent, and continuously refining its strategies. Overall, the company is confident in its ability to deliver consistent growth and create lasting value for its stakeholders in the coming year.

KEY RATIOS:

PARTICULARS	2024-25	2023-24	Change in ratios in %
Current ratio	7.86	35.95	-67.18%
Debt- Equity Ratio	0.06	0.00	1636.49%
Debt Service Coverage Ratio	N. A.	N. A.	N.A.
Inventory Turnover Ratio	281.84	100.09	21.28%
Return on Equity Ratio	2.94%	3.56%	-17.37%
Trade Receivable Turnover Ratio	N. A.	N. A.	N.A.
Trade Payable Turnover Ratio	31.01	22.59	37.27%
Net Capital Turnover Ratio	0.18	0.21	-43.81%
Net Profit Ratio	30.94%	26.97%	14.75%
Return on Capital Employed	3.71%	3.56%	4.23%
Return on Investment	7.04%	2.67%	163.51%

REASONS FOR MORE THAN 25% VARIANCE

RATIOS WITH VARIANCE MORE THAN 25%	REASONS FOR VARIANCE
Current ratio	Due to higher current Liabilities and a decrease in current assets.
Debt- Equity Ratio	Due to Bank Overdraft
Debt Service Coverage Ratio	Due to the Finance cost on the Bank Overdraft
Inventory Turnover Ratio	-
Return on Equity Ratio (in %)	-
Trade Receivable Turnover Ratio	-
Trade Payable Turnover Ratio	Due to a decrease in average trade payables
Net Capital Turnover Ratio	Due to higher working capital.
Net Profit Ratio (in %)	-
Return on Capital Employed (in %)	-
Return on Investment (in %)	Due to higher interest income

CAUTIONARY STATEMENT:

Statements in the Management Discussion and Analysis describing the Companys objectives, projections, estimates, and expectations may be "forward-looking statements" within the meaning of applicable securities law and regulations. As forward-looking statements are based on certain assumptions and expectations of future events over which the Company exercises no control, the Company cannot guarantee their accuracy, nor can it warrant that the same will be realized by the Company. The company assumes no responsibility to publicly amend, modify, or revise any forward-looking statements on the basis of any subsequent development or on the event of any loss that any investor may incur by investing in the shares of the company based on the "forward-looking statements."