Good day, and welcome to The Indian Hotels Company Limited Q2 FY 2021 Earnings Call being hosted by Mr. Puneet Chhatwal, Managing Director and CEO, IHCL, and Mr. Giridhar Sanjeevi, EVP and CFO, IHCL. As Reminder all parties on the line will be in listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes.
Should you need assistance during the conference call, please signal an operator by pressing star then zero on your telephone. Please note that this conference is being recorded. At this time, I would like to turn the conference over to Mr. Puneet Chhatwal. Please go ahead, sir.
Good evening, everyone. Welcome to the Q2 2021 results presentation this evening. Let me begin first on a good note. The icon of Delhi, the Taj Mansingh, or the Taj Mahal, New Delhi as we popularly call it, is now open. The lobby is fully renovated with the Emperor Lounge and the Machan with which a lot of Delhiites have grown up with, dating back to 1978, is open and running and has been restored to its old glory. I think this is a very important hotel for us, and we're very proud that we were able to retain this in our portfolio.
Now let me move to a little bit on the macroeconomic circumstances. As we are all aware, we hear it in the news, we read it in the newspapers, there is a contraction in the global GDP by more than 4%. And w Ithin the global distress that is there, tourism and hospitality has been hit the worst. There is a $5.5 trillion estimated loss in this segment and approximately 200 million in jobs. When it comes to India, the latest IMF projection was a bit north of -10% on GDP.
I'll come to the figures of the loss of revenues in India and also on the possible loss in jobs in a minute. I think it is time that we took stock of where we are coming from. If we go back into this year, 11th of March, I remember very well that the visas were canceled. 13th of March, the OCI travel was also canceled. We had a national lockdown, which was announced two days post the Janata Curfew on the 22nd of March.
24th of March, midnight onwards, we had the lockdown initially till 15th of April, but which kept getting extended till almost September, in certain states even in October. The flights then on a domestic front started resuming around the end of May, that's the 25th of May. We had the first Unlock 1 on 8th of June, followed by a very important state for us, Maharashtra, allowing 33% of hotel rooms to open and not food and beverage as of 8th of July. We started international flights under air bubble on the 17th of July.
In August, the hotels started opening up in Delhi. Maharashtra then announced in September the opening of the hotels. Of course, the restaurants in Maharashtra with limited food and beverage activity followed on the 5th of October. When coming to India, of course, it's an unprecedented downturn for the Indian hospitality sector. The branded hotels seem to have lost more than INR 31,000 crores in revenue. If we have the unbranded also, then it comes to INR 111,000+ crores.
Hotel occupancies when compared to last year April versus this year April fell from 75% to just 7%. There was a 55%-60% drop in average rates, which is an expectation not for April but for the calendar year 2020. That means from January till December. These figures are based on estimates provided by Hotelivate Research. Therefore, a total loss in hotel revenues from Jan to December is estimated at INR 142,000 crores or INR 143,000 crores. Having said that, there are certain clear trends that are emerging in travel patterns and guest behaviors.
Some of these are short-term, some of these are mid-term, and some are there to stay forever. What we are witnessing is that the consumers are gravitating towards trusted brands as safety is the highest priority. There is an increase in the last couple of months in domestic and regional travel. However the booking windows are shorter, and there is a willingness to pay premium for flexibility. This we had not seen pre-COVID that people pay premium. There was usually a bargain.
There is a shift in the purpose of travel, and if there is any travel at all in business, it is always linked to leisure, which we popularly call as leisure segment. There is a change in type of travel. It's more staycations, more drivecations, even though you have to drive for 10 or 11 hours. There is a multigenerational travel happening. That means, the grandfather, father, and the grandchild may be traveling together, which was not seen that often before, and mostly to remote locations.
There is a surge in new products, vacation rentals, home delivery business, car rentals, and home stays. Having said that, I think what we announced in the last quarter when we came up with the results was our strategy, our five-prong strategy, which we called R.E.S.E.T 2020. Just as a reminder, which the R.E.S.E.T stands for revenue growth, excellence in our operations, spend optimization, effective asset management, and being thrift and financially prudent.
I would now like to walk you through some of the revenue initiatives that we have introduced under the R.E.S.E.T 2020. The first one obviously is Qmin, which is our home delivery business in the first half of this year. Although it was launched towards the month of June, of INR 10 crores in enterprise revenue, more than 34,000 orders till date. I can even tell in October, despite Shraadh and Navratri, we've had a good October. This revenue is increasing.
We've just opened, in a soft opening phase, our first Qmin shop, a gourmet shop at the Hotel President in Mumbai. In the month of December, that means as of next month, we'll be launching our Qmin food truck business, three trucks are expected to go live. Hospitality at Home, we started very early in the lockdown phase, almost towards the middle of April. That's also done around INR 14 crores in business. That is delivery of hampers and different kinds of hampers.
We have come up with three different possibilities, which was very well accepted. With the festive season around the corner, we are seeing a lot of surge in that kind of sales. Very proudly, our first announcement on our platform that we have with AB InBev, we just launched the 7 Rivers Brewpub in Bengaluru. In 40 days, it's already done INR 60 lakhs+ in revenue. Some of these, it is not all the F&B innovations, but I think these are the most significant and relevant ones which we wanted to share with you.
With that, I move to how we went about unlocking the potential of domestic business. We had introduced our 4D strategy. Our 4D marketing initiative, which was you dream, you drive, you discover, and you delight yourself. This contributed more than INR 27 crores to our H1 enterprise revenue. But I'm also happy to report that this was also launched around June, and since then it has picked up significant momentum, and we expect this to be a very large contributor to our revenue by end of March.
Another important factor which we did not stop doing in this phase is lose sight on our growth. We have signed eight new hotels in the first half of the year. Obviously, our focus, as you will hear a little bit later in the presentation, was stronger on asset management instead of just signing new contracts. Some of the good opportunities we did focus on, and we signed eight contracts, added them to our pipeline, totaling around 750 keys. A snapshot of few new openings that are coming.
In this month, we will open the Taj Skyline in Ahmedabad. It's a large property. It's on a management contract. We'll open the Vivanta in Trivandrum or Thiruvananthapuram, followed by the Taj Wellington Mews in Chennai. This will be the first property in India that will be run by ladies or associates only, whether in engineering or as general manager or as a chef or in the housekeeping area. Finally, the Taj Chia Kutir in Darjeeling.
We are quite hopeful that in the next 90 days we would have opened these four, but we expect to open around 10 hotels by 31st of March. One important opening that is not mentioned here is as expected around the 10th of November is The Connaught in Delhi. On the excellence initiatives, we have remained very focused. As you would all know, we launched as one of the very first companies, Tajness, a commitment restrengthened. Why restrengthened? Because Tajness was always there.
Our care to safety and security of our guests was always there. However, we have restrengthened it with the new norms of WHO and the Ministry of Health. Our NPS, Net Promoter Score has grown consistently even during this Corona phase. As you would have all noticed, we have been winning hearts and getting a lot of accolades, recognitions on various platforms.
Whether it is Rambagh being rated as the top hotel in India or among the 15 best in the world, or it is our properties, The Pierre in New York from Condé Nast, or the Maldives resort, The Taj Mahal Palace and Tower in Mumbai for three years in a row as the best hotel in the world from TrustYou, Taj Lake Palace in Udaipur, the best resort Taj Exotica in Goa. This goes on. I think we have a lot of iconic assets, and they do win hearts and minds and souls of people handing out these awards.
We move on to our spend optimization initiatives. In Q2, we had the same result as you see in Q1. We had a 51% reduction in the cost. In Q1, the main reduction came from the variable cost and a marginal reduction from the fixed cost. But as you see in Q2, that number on the fixed cost reduction increased by 30%. As obviously the business grows, the revenues grows, the variable cost reduction becomes lesser. In all, we were able to maintain a - 51% control on the cost.
As management, we are very pleased with that number. We move forward on where these costs optimization, on which heads it came from. It's of course the raw material cost as the revenues have dropped to such a significant level. Also on the admin expenses, on heat, light, and power expenses. These are semi-variable costs. We had good success in controlling them. Our fixed lease cost, which we'll talk about a bit more in detail.
As I alluded to you on the asset management focus of our development team and our operations and finance has helped us a lot in the fixed lease cost reduction as well as manpower cost by almost 40%. When we move further into effective asset management, and here it comes to how we secured significant lease waivers. At the IHCL level it is INR 31 crores, on subsidiary levels it was INR 37 crores, on group companies INR 24 crores, so totaling INR 92 crores of reduction in this cost.
The benefit received in H1 2021 for IHCL and subsidiaries amounts to INR 42 crores. Moving on to the thrift and financial prudence. I think on this we did quite well. We saved INR 43 crores versus last year same time in the first half of the year. We achieved this by exercising prudence on all corporate expenditure and especially redeployments and restructuring. When I say redeployments, it is because of our growth. We have an opportunity to redeploy our associates in new properties that are opening up.
We also have an opportunity to redeploy some of our people in other companies within the group that are growing despite the pandemic. We are very content to have had that opportunity and have done successfully, and we feel that this number would only go higher because the redeployments did not happen in the month of April or May. It took time for it to kickstart. Most of the amounts that you see, they are really an impact of mid of June till end of September for the first half of this year.
Further on the liquidity, we have taken multiple steps. We have drawn down in IHCL on INR 750 crores of long-term debt from April to September. We have secured additional lines for any further requirement. We are exploring on a daily basis monetization opportunities. It was part of our Aspiration 2022 strategy. It's a part of our R.E.S.E.T strategy. We have deferred any non-essential CapEx and renovations that could have been reversed.
Therefore, if we were to summarize on the revenue growth initiatives, we had INR 135 crores, which would be a not like-for-like revenue versus last year same time. That means the source of this revenue is the new revenue initiatives and not what we had last year. We had spend optimization with control on cost of another INR 149 crores in first half. On effective asset management, around INR 46 crores, and INR 43 crores of corporate overhead reduction.
With that, we move on to some of the performance highlights in terms of how our portfolio of brands have performed. These are figures based on all brands. If we look at the RevPAR on the domestic hotel spaces, we see some early signs of recovery. As I mentioned in April, from 75% occupancy last year we went down to 7%. The RevPAR dropped to INR 340 approximately, and it is up to INR 1,340. INR 1,000 have been gained on the RevPAR. This is on all portfolio, whether the hotels were operational or not operational.
When it comes to operational portfolio, the drop was to INR 700 in April, which is more than doubled from April till September. If we look at it this way, there is also a 4x growth from April to September if we looked at throughout the entire portfolio. On the operational portfolio, it's more than doubled. In terms of our performance to the industry, IHCL had in Q1 a RevPAR of INR 513, which grew to INR 1,061 end of September. That is 2.1x.
The industry RevPAR based on STR Global that we have received was at INR 465, which went to INR 796, so 1.7x. We are seeing a large growth, especially in Q2 on our portfolio. This is really for two reasons. I think one is because we do have a lot more resort assets, so which helps because the demand is really domestic and is leisure-driven. The second reason is also the trust, which I alluded to.
There's a trust in the brand, and especially Taj, as one of our brands, is benefiting significantly from the trust and the love and the emotion of the people. It is currently outperforming its competitors in almost all markets, with the exception of one. Going forward, I think it's very interesting to see the slide on Ginger. As you will see, Ginger also came down from very high occupancy to low occupancy in the crisis, but it was the first one to recover. In September, it already went north of 50%.
I can also inform you that even October it finished north of 50%, and its RevPAR index grew from 0.7 approximately in April to almost doubled or more than doubled at 1.48 in September. We are very pleased with this also because Ginger as a brand has already achieved for the first half of this year, 53% of last year's revenue. As we all know, most of the companies struggled in Q1 and most of the brands struggled, I mean, almost all. I think Ginger has shown a lot of resilience, and we thought this slide is worth sharing with all of you.
Another thing when we move forward, you see the decline in revenue was as dramatic as we are seeing the increase in numbers on a month-by-month basis. As we hit a low in April, going down to as much as INR 35 crores, in September it almost went close to INR 150 crores. When we move on to the EBITDA, which was negative in April at INR 100 crores, has actually turned positive in September. The trend continues that way, that the losses are getting narrowed on the PBT level and on the PAT level, and the EBITDA is turning positive.
We see no reason why this trend should not continue in Q3 with similar kind of increases in all these four segments of revenue, EBITDA, PBT, and PAT. If that's a kind of, without giving a number to it, a kind of a guidance in terms of trends. Coming to our consolidated performance. In Q2, we had a total revenue of INR 324 crores. That's increase in over Q1 by INR 150 almost. We narrowed the EBITDA loss from INR 234- INR 83. That's an improvement of INR 151.
I think more important is that although there was an increase in revenue of INR 149, the EBITDA improved to INR 151. The flow-through that the management team has been working on has been quite positive. We have also narrowed the losses on PBT level at INR 263 versus INR 336 in Q1, and PAT from INR 280 going down to a negative of INR 230, which is another improvement of INR 50 crores. With that, I would like to hand over to my colleague, Mr. Giridhar Sanjeevi, to take you through the details of the financial performance.
Yeah. Thank you. Moving on to the consolidated financial performance, the details. I think as we can see, the Q2 revenue was INR 324 crores, which we represented as compared to last year's decline of 69%, but represented a significant improvement from the first quarter number of INR 175 crores. In terms of expenditure, as was highlighted earlier, we continued to maintain total expenditure as saying that 52% as compared to last year in Q2, which was the same levels for the entire H1 as well.
This is driven by all-round focus on all the lines of cost, corporate overheads, employee benefits, and all other lines of cost actually. On finance costs, the finance costs were steady at around INR 97 crores, and H1 was at about INR 185 crores. We had an exceptional of INR 20 crores due to some exchange gain loss on all derivatives. We ended the quarter with a loss of INR 230 crores. The total half-yearly loss is INR 510 crores. Moving to the next slide. This is just some details of exceptional items.
I think in the current quarter, lease concessions comes as part of the top line. We have revalued some of our liabilities in relation to the purchase of the Sea Rock shares. That gives us a gain of about INR 23 crores. I think those are the two exceptions worth noting this time. Move on, please. In terms of the standalone reported revenue, we reported a revenue of INR 215 crores. Expenditure was at INR 253 crores, which was -47% as compared to the previous year. It is at the similar levels even for the entire H1 at -46%.
Finance cost was at INR 69 crores. There was some marginal exceptional gains in this quarter of about loss of over INR 16 crores or so, giving a net loss after tax of INR 142 crores. For the H1, the net loss was about INR 380 crores for standalone. Moving to the standalone exceptional numbers, I think, as you know, we do provide for the US losses, and that was about INR 29 crores in the quarter. Move on, please.
In terms of some standalone revenue metrics, essentially what you see in H2, in Q2 from July to September, is that between August and September, clearly you see a steady improvement in occupancy. You see a significant jump in ADR from INR 4,500- INR 5,000- INR 6,500. That's a significant jump in ADR. RevPAR also going up from INR 1,400- INR 1,500- INR 2,200, a 50% jump plus in terms of RevPAR. There was definitely a shift in business.
Post-August, we saw the quarantine business come down and the regular FIT business coming up actually, that those are reflected in the numbers of Q2 and September actually. Similarly, on the domestic revenue, the network business receiving the same impact where the occupancy does go up by 6% or so from 26.8% to 32.4%. ADR, there is a significant jump of about 10% from INR 3,645 to INR 4,100. RevPAR, of course, you see a significant jump of nearly 50% in RevPAR.
That is reflected in the domestic network metrics as well. In terms of the debt position, I think we continue to be prudent in terms of drawing down on debt. We are well-positioned for liquidity. Our net debt in standalone as of September 30th was INR 2,100 crores, and consolidated was INR 2,900 crores. Weighted average cost of debt continues to be well managed at 7.8% for standalone.
Net debt to equity is still comfortable at 0.5 or so, and net debt to EBITDA on a 12-months trailing clearly has gone up to 4.97. Consolidated numbers similarly are 6.7% for debt. Net debt to equity has been about 0.68, and net debt to trailing EBITDA has been about 7.54. Overall, liquidity position remains comfortable. I think before I end, I just wanted to highlight some trends which are relevant for IHCL. I think these are external trends and those which are relevant and within the circle of influence.
From an external macro trends perspective, very clearly in India we are seeing that the COVID cases are going down. There's a 30% drop in new infections and that augurs well. I think that has allowed the government also to reopen all the hotels and allow restaurants and all other parts of the hotel operation to open. Domestic air traffic is definitely going up, 40% improvement in September versus August. Steadily we have been seeing, if you look at the airline results, you are seeing that the air traffic numbers are going up.
Domestic tourism is definitely going up. There is almost like a revenge travel in terms of especially in the leisure destinations actually. You're seeing a lot of domestic tourism and leisure travel rebounding. Some of our destinations like Goa, Rajasthan, Rishikesh, and other leisure destinations are doing very well actually. As was described earlier, Taj as a trusted brand stands to gain more and people are willing to pay a premium for all their travels actually.
That is something which is important for us actually. Within IHCL's control of influence, very clearly we are focused on revenue, including the new lines of revenue through our R.E.S.E.T initiatives. And th ere's a visible increase in revenue month-on-month, and we hope that will continue. We are in the season at this point of time. With the unlock down and being in the middle of the season, we do believe that this quarter and the next quarter we will see the momentum in terms of revenues.
Very strict cost control and spend optimization is there. You have seen it in the 52%+ ADRs during this quarter. We have outperformed the competition in key leisure markets like Goa and other key metros. Ginger Hotels has exhibited very strong performance, exceeded and sustaining 50%+ occupancy levels.
We continue on our growth momentum in terms of opening hotels which are asset light except for one property actually. We continue to watch the external environment and do all that we can in terms of optimizing revenues, managing costs, and managing balance sheet and liquidity management. With that, I open it up for questions.
Thank you, sir. Participants, if you would like to ask a question, please signal by pressing star one on your telephone keypad. If you're using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment. Again, press star one to ask a question. We'll pause for just a moment to allow everyone an opportunity to signal for questions. I would also request everyone to say their name and the company they belong to before asking a question. We will now take our first question.
Yeah. Hi, this is Achal from HSBC. I wanted to understand a few things. First of all, if you could please talk a bit more about your new revenue initiatives. You have given INR 135 crores of number as in it's a new revenue from the initiatives. How much of it flew through to your bottom line? What I wanted to understand is that if you could talk about the profit margins you earned in your different revenue initiatives like Qmin and all, that would be very helpful, please.
Okay. Should I take it, Puneet?
Yeah, you can. I will.
Yeah.
I want to add.
I think if you look at businesses like Qmin, I do not know if you have experienced Qmin in terms of the F&B. I think the average ticket for two people is approximately INR 3,500 to INR 4,000, and then you sell at the same prices as the restaurants. The margin on this business is very high because we are not discounting these. These are not Swiggy type of revenues. Hospitality at Home also, these revenues are all at a full pricing actually. Some of these initiatives like Qmin and Hospitality at Home are completely at full pricing.
The four key initiatives which are in terms of taking advantage of the bleisure destinations and maximizing those, the INR 27 crores that was pointed out, these are also at significantly good ARR levels. Therefore, I think there is no compromise at all in terms of the margins on some of these initiatives. Puneet, do you want to add to that?
Yeah, just to add to this, a lot of these businesses are incremental. The costs are incremental and so is the revenue. For example, Qmin is the same kitchens, is the same chefs, cooks who are preparing it. The incremental cost is really the raw material cost and the cost of delivery. We are also not using a third-party provider, so that makes the margins even larger. We're looking at margins on most of these businesses, I would say as a hybrid north of 50%. Why north of 50%?
As I said, this is not where we have deployed capital in building a space. It's using the existing spaces and using the existing facilities, existing manpower, the cost which we would have had anyways. Also I think the same thing on hampers or the Hospitality at Home, the same on the 4D initiative. And I think there is a lot of wellness retreats that we have launched, staycations that we have launched, temporary office working that we have launched.
You will see more and more of this coming because partly we have to adjust our business model to the new reality, and we have to try to find latent demand that did not exist before and try to capitalize on it. But yes, one-line answer is all these businesses are very high-margin business because we cannot be on one hand saying we will not be doing any CapEx and actually reducing and deferring any planned CapEx, and that's how it makes the model very asset-light.
Right. Sir, is it fair to assume that out of the total new revenue of INR 135 crores, almost like INR 60 crores-INR 65 crores or slightly more would have flown to the bottom line, right?
Absolutely, it's fair to assume that.
Perfect.
Even a little higher than that.
No, by the way, I use Qmin, and it's a great initiative. It's a great thing, to be fair. The other thing also I wanted to understand about the cost evolution. Of course, you're maintaining your 50% cost decline. How do you see it going forward as the business picks up, as you open more hotels? I think some of your employee costs will come back and all those sort of things. How should we expect your cost would evolve over the next two quarters at least? Then probably if you can talk about a bit more into next year.
Sure. I would go first and then maybe, Giri, if you want to, you can add something. You see, this is a historic opportunity also. As bad as this COVID news has been, it has been an eye-opener for the global hotel industry to check every cost that we had. Not that we were not looking at costs before, but when your revenues come down to almost a zero level and the hotels are shut, then you have all the time to keep looking at every possible cost 10x a day than you did when it's business as usual.
My personal opinion for the industry and especially for IHCL, I would say, let me limit it to our own company, is that we came up with this R.E.S.E.T strategy, and that means it's also a R.E.S.E.T on the cost base going forward. This is not a temporary thing.
We don't do those temporary things. We have not furloughed any staff. We have not taken employment away from anyone. Our salary contributions that we have done, we have created trusts for families supporting staff who have lost jobs because they were not directly employed by us, rather by one of our partners or something.
That way, I think we do see this as an opportunity to come up with new operating business models, and we are doing that. We are going to redefine our business class rooms proposition, our Taj Club Lounge proposition. Everything will be R.E.S.E.T for the time coming ahead of us and going forward. Giri, if you want to add something to it.
No, that is right. I think what you saw actually in the first quarter was the reduction, which was more in the context of variable costs. As we go forward and Q2, we have seen that the cost savings are more in the fixed costs, and you will see much more fixed cost reductions coming through. In fact, if you see the Q1 fixed cost number last year, it was about INR 156 crores. It came down to INR 123 crores per month. In Q2, that came down from INR 157 crores- INR 112 crores. Therefore, I think there's a lot of focus in terms of trying to drive down the fixed costs.
As Puneet said, it is all changes in operating model and trying to make fundamental changes in the way we are working, starting with the corporate office to everywhere else, actually. There's a very strong focus on improving the cost base actually.
Great basically, I'm assuming that these cost efficiencies would continue even if the full business picks up to the original scale, and then that will benefit, right?
That is right. That is what we want to do. In fact, one of the things we talk about is that in the previous year, we needed INR 4,500 crores of top line to generate, say, INR 1,000 crores of EBITDA. I think the attempt is to say that can we do it at a much lower expense, similar EBITDAs at much lower levels of top line. Therefore, I think the focus is very clearly there in terms of bringing down the cost base to a different level, actually. Absolutely.
Right. Fair enough. The other thing I also wanted to understand more about the change in customer mix. Until recent quarter or the quarter of September probably, you would have had many people. Most of the traffic would have been driven by the COVID, the medical staff and quarantined people and all.
That must have been changed or that must have been replaced by the normal bleisure demand. Just wanted to understand if you could talk a bit more about what kind of change are you noticing now from your traffic in the quarter to September to now this starting quarter of December.
Yeah. I think what I can say is that with the reduction in the quarantine flights what we are now seeing as we had predicted earlier, the bleisure luxury business picking up, the weddings picking up and what we are seeing in terms of some of the destinations like Goa and Rajasthan and other destinations.
We are definitely seeing people willing to pay and take their time and stay in all these hotels. Therefore, I think it's more domestic tourism related. No international tourists are clearly coming, but therefore people are willing to pay, and that is really the change. Yeah.
Sorry, looks like the participant line has been removed from the Q&A section. Participants, please press star one on your telephone keypad to queue for questions. We'll take the next question. Line is open. Please go ahead, sir.
Sorry, am I audible?
Yes, sir.
Sorry. I think my line had some problem. Giri, sorry. Just continuing that question. The destinations which you just talked about are more of a sort of a bleisure destination. Probably that highlight that there's some recovery in the bleisure demand. Because if you see air travel, there is a lot of recovery in bleisure demand.
Sorry, there is a slow recovery in the bleisure demand, but more of a MSMEs travel which is taking place. If that is the case, what kind of traffic recovery you are looking at in terms of business destination like Mumbai, Bangalore, Delhi and all?
Business travel clearly is slow. You are right that MSME business has picked up in terms of travel. That is one of the reasons why you see the incremental occupancies also coming through in places like Ginger, where the occupancies have gone up above 50%. Ginger clearly benefits with that segment. As far as the premium hotels are concerned, I think it is more bleisure luxury than business travel.
Right. Last question from my side. I'm really sorry for a bit of long list. In terms of liquidity, so if you could please guide us on what kind of cash burn now happening on a per month basis, that'd be helpful.
No, I think between cash and lines, we have more than INR 1,000 crores. I think we have been very prudent in terms of expenditures, actually. I think the good news in this business is that as the revenues pick up, as they have started to, the requirements of cash drop. We believe that we are well protected for now in terms of liquidity.
How the cash burn has improved versus the last quarter?
I think cash burn has definitely improved. I think in the initial months it was INR 200 crores a month in terms of cash burns. I think operating cash burn now has come to less than INR 50 crores or so. Of course, there's always other things which come up. This, as it goes forward, hopefully should drop. We'll keep a close track of it.
Okay.
I think, Giri, it could be fair to say, given the current business on books and whatever we know, we should be cash positive as of November. We have the wedding season, which is kicking in, we have the festive season, which is kicking in. We have no Shraadhs, we have no Navratris, which were there in October, and October also ended up in a similar trend as September was over August, October was over September.
If November goes that way, I don't see that we would have need of cash burn. That's all if and but. What we can see today for the next three weeks, it does look that the jumps would be similar.
Right. Perfect. Thank you so much, and wish you good luck.
Thank you. Participants, I repeat, please press star one on your telephone keypad to ask a question. We will now take our next question.
Hello. Hi, thanks for the opportunity. This is Vikas from Antique. Sir, during your opening statement, you have talked about that you have deployed the employees in other group companies, and clearly one of your group companies is hiring pretty strongly. Is it possible to quantify what percent of the total employees we are transferring to the other group companies?
It is not just transferring people. I think the strategy that we announced three years ago was the 3R strategy of reimagine, restructure, and reengineer. When we reimagined our brandscape, we needed certain skill sets, so we hired certain kinds of people. In order to reengineer our margins, we started changing the business model. Restructuring is as per the needs of today. There are different examples at corporate level, and I did mention that we have the ability to redeploy because of the needs and wants of business are different.
As an example, when we opened The Connaught in New Delhi, almost 100% of the employees there are from other group properties. Whether they are from Taj Mahal, New Delhi, or they're from Taj Palace, New Delhi, or from Vivanta New Delhi, Dwarka, or even from Taj Wellington Mews in Mumbai. The growth provides a normal progression for the employees, and we are able to become more efficient in the operations, and that's one kind of redeployment. The other redeployment is, as an example, if we club the functions of a couple of departments.
Recently we aligned our revenue management and finance into one function. That way we don't need two because one person retired, so the other one could take over two jobs because both are numbers-driven. That's another example. The third is there is a possibility as one of the group companies, as you said rightly, is expanding, and we would be working with them very closely. We are on the Tata Neu, for example.
It's good for them to have some people from our own system because it would help them in doing the super app and addressing the needs and wants of our business. That's how we have been very step-by-step mindful of our also mid-term and long-term needs because just redeployment is not what we do. We have to address in a very smart way the talent that is needed to take the company where we wanted to take it to, where we were 80% there on the pre-COVID level, and how we are going to get to the 110% there in the next few years.
I don't think that kind of a quantification. You will see the results in our corporate overhead quarter on quarter basis, if that's a way to answer it, but we cannot quantify these kind of numbers. Giri, you want to say something on this?
No, I think that's fine. I have nothing else to add from this.
Okay. My bad. I thought the move was more to do with managing the employee cost in the near term. Second, my question is, on the corporate side, how the demand is shaping up, and I'm looking for these answers more from a medium-term perspective and not near term. Clearly most of the tech and consulting companies are talking about medium-term saving coming from travel and work from home with the use of collaborative platforms and all.
The dichotomy is when we look at the smart money, private equity players especially, they continue to invest in commercial space. Just want your view on this and what you're hearing from your corporate clients. Do you think the mix between bleisure and corporate travel will change meaningfully? Again, maybe from 3-5 years perspective, if you can throw some light on it, not here.
Well, I am a firm believer that corporate travel will be back and will be back very strongly, and it's a matter of a few more months at the most when there is a vaccine. Also the work from home for the tech companies is there to stay. As I said in the presentation, some of the changes are short-term, some are medium-term, and some will be there forever. It's like getting through security at the airports. Before one could go in the airport, now you cannot go unless you have a boarding pass.
You could enter hotels and leave them without going through the baggage check and putting your mobile away and the scanning, et cetera. Some of these things are there to stay forever. If anyone believes that now business can only be done on Zoom or like what we are doing now, and we will never have an investor meet in our Crystal Ballroom, I don't think that is true. If it's not three months, then it is six months, and if it's not six months, at the most, it is nine months that we will be meeting you in person and doing these investor meets.
I have been traveling. I've been to all major metros. I've been to Hyderabad, I've been to Bangalore, I've been to Delhi. I've even traveled abroad, and I'm going again at the end of this week. Some private, some on business. I can tell you I've seen empty airports in July, and I've hardly seen flights, and now I see almost a lot of activity. And i f you look at the latest statistics prepared by, I think, MakeMyTrip, and it was on a CNBC channel, the growth in September over August was 40% in air traffic.
As per also the Ministry of Civil Aviation, a lot of traffic is back to pre-COVID level, and all of that is not bleisure. Some is also corporate. I think it will keep increasing as time goes by and as numbers keep coming down in terms of infections. However, and having said that, if there would be another second wave, which nobody believes in India, like there has been one in U.K. or in the other parts of Europe, then it's a question mark whether it's a nine-month story or a one-year story or longer.
The way things have moved in the last 60, 90 days, I can tell you, not a projection but based on my personal experience of traveling to these cities, that there has been a marked improvement versus when I first came after my first trip maybe in July or something, and it was like you end up in a haunted airport. There was hardly anybody around in Mumbai. It was also very carefully opened in Mumbai. It took much longer.
Delhi had started, but Mumbai had a lot of brakes on, and corporate business has a direct correlation to corporate travel, and most of the corporate travel does not happen on drive-cation. You don't drive to destinations unless you're at a Ginger-level customer. You're usually flying from one destination to the other.
Sure. This is very helpful. I just have one last question. Firstly, it's good to see it turning a bit positive in September. My last question is how is the overall booking coming up for the holiday season? Any early signs you are seeing would be helpful, if you can share. If possible, to also quantify holiday bookings compared to the last year, where we stand, if you have any kind of a rough estimate around it. That's all.
Vikas, the thing is that there is a lot of pickup is become very short-term. If you had asked this question three weeks ago, I would have said it's slow. In the last three weeks, we have picked up a disproportionate amount of business, and especially for these three months, October, November, December. When I say three weeks ago, it included the remainder of October. Last 10 days of October for us, and going forward, November, December, have seen a significant pickup.
But as your question, the previous question rightly pointed out, and also of the previous person who had raised questions from HSBC, most of these pickups that we are seeing is on bleisure, and obviously all of it is domestic. We'll see what happens once international travel opens up. On bleisure, definitely Rajasthan is leading the way. Goa is leading the way. Coorg and areas around Coorg are leading the way. Shimla, Rishikesh, these are destinations that are doing very well.
If somebody's going to Shimla, then they're also stopping a night in Chandigarh. A lot of those kind of travel is happening, and there is a lot of pickup on that. Definitely Christmas, New Year, we are seeing a surge in bookings. The destinations I just mentioned, I can tell you, they might even be performing better than last year.
Okay. Thank you.
Thank you. We take the next question.
Yeah. Hi, this is Kaustav from Rare Enterprises. I just wanted to understand, what did you exactly mean by you've turned EBITDA positive in the month of September? Did you mean for your standalone business or the consolidated business as a whole? Also, could you just go a little bit more into detail in this as to how we have achieved this and the key components to this?
Yeah, sure. I think we did see that both in standalone as well as in consolidated. I think in terms of general EBITDA positivity, what we're now seeing is that with the pickup of business, we are slowly seeing the increase in the number of hotels, which could potentially break even on EBITDA actually. I think that is definitely now the language has changed.
I would not use the language in the first quarter, but as the second quarter progressed and the unlocked lockdown has happened, we are gradually seeing that hotels will start becoming EBITDA breakeven, hitting EBITDA breakevens actually. That is definitely a trend. And therefore, we are looking forward to Q3 in terms of business to see how many of the hotels get to EBITDA breakeven and what does it do at the network level.
As far as September month itself is concerned, I think it was aided not just by operational incomes, but it was also aided by the non-operational incomes, which resulted in the EBITDA positivity in the month of September. I think one of the things I want to emphasize, both operational and non-operational, is that these are extraordinary times anyway. Therefore, I think what is very important for us, Kaustav, is that it is nice to see a marker which says EBITDA positive, which we have been wanting to see for a long time.
I think, frankly, it doesn't matter whether it comes through operation or non-operation. September was definitely aided a little bit by that. The bigger picture, as I said, is that as the performance improves, I think you will see cities like Goa, cities like Delhi, cities like Bombay slowly start getting to EBITDA breakeven. I think that is what is the more important thing, and that is why this quarter, Q3, is important for us to see the pickup in business and achieve those milestones actually.
Okay. What was your occupancy rate in September on a standalone basis for the domestic business?
Yeah, I understand.
We're just trying to relate EBITDA positive to your occupancy rate.
Sure
the remaining would be non-operational. That's why.
As you saw in the presentation, the occupancy in September was about 34.5%. That was the occupancy in the current year in standalone for the month of September. That was as compared to 30% in the month of August. The ARR definitely jumped. That's the other thing. It was not just an improvement in occupancy from 30%- 34.5%. The ARR jumped from INR 5,087- INR 6,500, which is nearly a 30% jump in the ARR.
I think the quality of business, because as I said, the quarantine prices came down and the FIT business has picked up. I think it's a combination of occupancy increase as well as rating, which is where we saw the revenue percent actually.
Okay, great. Lastly, when you speak about non-operational income, which aided EBITDA turning positive, could you speak a little bit about this issue? Do you mean the food service business? What else do you mean by non-?
No, Kaustav, I think if you see the standalone exceptionals that we have just highlighted in our presentation. We had a couple of standalone exceptionals. Like for instance, number one was the lease rental concessions under the Ind AS comes as, what do you say, in the top line. To be honest, even if it is taken as expenditure, the EBITDA positive would have still occurred actually.
We had a fair valuation of one of our financial liabilities, which gave us about INR 20 odd crores in the exceptional. That is the only thing which came in, which is, I would say, non-operational. There was a small gain on plant which gave us INR 3 crores or so. That's all.
Okay. Any progress on our monetization strategy, simplification of organizational structure, anything from last quarter which is moving towards the right direction?
I think as we have always discussed, monetization is something we are progressing on one or two of the monetizations. They are work in progress. I think some diligences are going on. Hence, I think my sense is that in the next three months or so, we should be able to announce the first of the significant monetizations actually. As far as the restructuring, if I remember you right, about restructuring in terms of structures, I think that will take some time.
Okay. Thank you so much.
Yeah. Thanks, Kaustav.
Thank you. We take the next question.
Yeah. Hi, sir. Sumant here from Motilal Oswal. My question is particularly for the international business performance. Can you give more update on that?
Yeah.
Sure, Sumant. It's a mixed bag. I'll just give a little overview and then let Giri give the details. Dubai, because of IPL, is doing very well. The hotels in the U.S. and Cape Town have just opened in October, so they are not included in first half performance because there was a lockdown out there, especially in the state of California. When it comes to Maldives, it's picking up quite well. Sri Lanka had started and it went into a lockdown, so it's completely shut down.
Bhutan for us is also shut down. I think London, which we were expected to do much better, has gone down into a lockdown as of today or tomorrow for a month. The positive on this London and U.S. is there have been a lot of packages given by the government which reduce your both fixed cost and variable cost, which is in our control. The impact on profitability is pretty much marginal versus last year, I would say in the same time last year. Is that fair, Giri, to say?
I think London, yes. London, I think what has happened is there are significant savings in London. Very clearly. Absolutely. Yes, that is right.
Okay, what about the U.S.?
Sorry, go ahead.
I think the US businesses were certainly down. There was significant expenditure control because as I've explained, Sumant, earlier, about 85% of the international staff, we were able to do a temporary layoff for six months or so, that resulted in the significant manpower savings. We were also able to follow and make some changes to the permanent staff there. I think that definitely helped. We also, as you know, renegotiated these discussions with seven [Inaudible] corporations.
All of those have definitely helped in terms of reducing the cost there. You also see, of course, our U.S., there are cash losses because of the nature of the operation, you have seen it in the standalone exceptionals. There are INR 29 crores loss that we sort of reported in the standalone, which is reflected under exceptionals this time.
Yeah. Can you discuss more about the overall key customer mix changes in the key market like Mumbai, Delhi, Hyderabad, Bangalore? From where the demand is coming, like wedding or staycation and any other things.
The demand, Sumant, is different in different places. When Mumbaikars want to drive to Goa or take a flight to Goa or to go to Nashik or to go to our newly opened amã Homestay in Lonavala on Madh Island, that's one way of getting the business. The other, what we are seeing in Mumbai is a lot of staycation. It's people who live coming into hotels for a few days or nights because they have either bored or fed up of staying at home. A lot of that is happening.
The rest is you have some airline crews that stay with you have some other regular wedding business. The very famous wedding that recently happened at Taj Mahal Palace and Tower. It brings in some business. It doesn't bring in any more, 100, 200 rooms because so many are not allowed. It does bring in business, and especially in the wedding season, we are seeing a lot of this occupancy coming in through that source.
Okay.
Limited corporate travel, more bleisure.
Okay.
Sorry we are seeing, Sumant, also people coming from places like Gujarat and Pune to Mumbai and stay in Taj Mahal Palace Tower. That also we are seeing. They also stay in Taj Lands End.
How is the IT company staff staying, or pharma industry staff staying? This kind of customer is still there or?
Pharma is yes. The answer is yes. But IT is no because the people who are best to work from home is IT, right? We have seen a short-term reduction or fall in that IT source of business where it was coming from IT companies. There may be for the hotel business, the recovery for the next three, four months will be slower. What will not be slow is, as I said before, the festivals, the weddings, the celebrations and the normal corporate travel, it will come. It's already coming in. Slowly, but it's coming.
How is the inquiries for December and January for the wedding, for the year-end and New Year?
We already answered that some destinations are even expected to do better than last year, and some are not doing as well. I think what we are waiting for is for the big metros to kick in. Delhi, Mumbai, Bangalore. If they kick in stronger in the next few weeks, we can take that offline. You can give us a call in a few weeks' time. We are expecting that, but we have not yet seen it. As I said, leisure destinations of Rajasthan, Goa, south of India, even Fisherman's Cove outside of Chennai, these are doing very well on the weekends.
Look, can you give us a INR 135 crores, the sales from new initiatives breakup, which segment is coming more, apart from Qmin and all?
Can we discuss that offline?
Okay.
That we can give you the figures?
Okay. Thank you so much.
Thank you. Victor, take the next question.
Hi, sorry. This is Achal from HSBC again. I had one follow-up question. Just want to understand, basically, as we are finding that the leisure demand is picking up, and then of course, we are entering the most busiest quarter, that is quarter December. What happens as we enter into the next quarter?
Because then the leisure demand anyway will decline. Usually there's no leisure, and the corporate travel demand is low. How do you see, following this quarter, how would the business take place? I mean, how the demand would happen? If you could please talk about that.
Well, we are seeing, as we mentioned before, a recovery in demand. Leisure is strong, but hopefully the other segments start coming in too. You're right that after 15th of January, leisure will slow down. In such a historic circumstances that we are all shocked and surprised with, when revenues also hit zero, or as I said, they were as good as nothing was there.
You see those jumps, and at some point of time, we started getting Vande Bharat and we had the medical staff, and then they got replaced by higher-paying people, as Giri just now mentioned. The rate changed but not the occupancy to that extent because the lower-paying business replaced. Now, when did our industry ever do Vande Bharat or medical staff? Something or the other comes up and will come up going forward as the impact of lockdown is beginning to get diluted on all fronts.
I think you all see it on the roads. Three months ago, there was not a person on the road, or after every two or three minutes a car used to pass by. Now suddenly, if you go to Peddar Road, Chowpatty, whatever Marine Drive, they are full. If you go to Delhi, it's the same. You try to go from airport into the city and you get a lot of traffic.
I think similarly, traffic and normal business will keep coming back as has happened with the human civilization for thousands of years. At some point there will be an end to this also. It's not going to stay there forever. When it ends, people will start traveling.
Right. No, fair enough. Thank you. Thanks very much.
Thank you. We now take the next question.
Hello, am I audible?
Yes.
Hello?
Yes.
Yeah. My first question was, can you give some breakup between business and tourist locations, hotel and inventory? What would be the difference between business and tourist locations in terms of occupancy, if you can give some light on that? Can you tell what can we do to improve the performance in hotels in business locations? In some of the business locations or a city like Delhi, Bombay, where we would have multiple hotels. Can you give your thoughts on that? Yeah, I am Himanshu from PGIM Mutual Fund. This was the first question.
I can tell you the trend is like this, that for us, Goa is operating at almost in the last six weeks or so, or the four weeks or so. Going forward, we are expecting around 80% occupancy in, let's say, the established properties that we have under the Taj umbrella. The business hotels that are at around 40% in the cities you mentioned. With the exception, one hotel in a city could be at 60% and another one is at 40%. Yes, there is one hotel in Delhi which does 60% for us. What can we do?
We are doing and putting a lot of initiatives, as I said, in place. Up till now you've seen a lot driven by wellness, by staycation, by the 4D, which are more linked to driving to a destination. Now you will see us rolling out more and more corporate packages. We think that way we'll be able to stimulate demand.
There is no point launching corporate packages when a lot of companies are saying that their people should not travel or avoid travel. That's a wrong time to launch a package, I think. That is slowly subsiding, and a lot of people are traveling now.
Okay. Yeah, second question was, what type of trends in booking you are seeing in the winter vacation period? What would be your plans to have good occupancy at that period of time when a lot of foreign tourists used to come for a long holiday season? Can we expect to get more domestic tourists to fill that space as much lesser people from India will move out? Any specific thought process or work we have started for preparing for those longer winter vacation period? Some thoughts of yours on those trends and the most profitable period.
We are seeing good demand for holiday season. That's not a problem. If there are foreign tourists not coming in, there are also 24 million Indians who used to travel abroad who are also not going because it's not allowed to go. That is your captive clientele.
Definitely, there is a segment that used to pay a big premium from coming from abroad on our palaces, which are 7- 8 palaces that we have in our portfolio that used to attract a huge premium from people, especially foreign origin. That segment is missing, and we are working hard to compensate for it. That's limited to seven, eight or maybe 10 hotels in our portfolio. We have more than 160 hotels in operation.
Okay. Looking at the trends, do we expect the occupancy in the winter vacation period, we can reach back because of Indians, or the inquiry levels, what you are seeing, can we reach those levels back in this winter season?
As I said at the outset of the presentation, in April this year, we went to 7% versus 75%. As just now my colleague Giri mentioned that on standalone, your previous speaker had asked that question. We were at like 34%, 35% in standalone in the month of September. That seven went to 35, which is 5x more in five months. We are seeing similar kind of trends on a month-on-month basis.
The jumps are higher because you're coming from such a low base. No matter how high the jump is, it will be difficult to get to the same level as November, December of last year. Why is that? Also the calendar last year was a bit different, and November, December were the two best November, December that one has seen in several years.
Last year, the November, December figures were very high. It is difficult to get to the same level for us. That is not only difficult, I don't think that will happen. If we get to 75% or 60% of that level, we would be very happy because we are coming from, as I said, 7%, 10%, 15, 20, 25, and we presented that Ginger is back to 53% of the revenue of last year for the first half. That is something we have to very closely monitor, but everything moves in the positive direction and on the way up.
Yeah. Okay. Yeah, one very interesting slide on and data on Ginger Hotels. Can you please tell what would be the reason for such good occupancy and performance for Ginger Hotel? Secondly, can we replicate some of those things at Vivanta, which is a business hotel but at a premium to Ginger? Would it be right to say if we remove the occupancy of Ginger Hotels from domestic network, the occupancy would be in 20s in that case? These on Ginger Hotels. One more, which would be the last. If you can reply to this, it would be helpful.
Ginger, the number of rooms is much smaller than the rest, so it will not go into the 20s. It will still get closer to 30 and above. I don't think that's the answer. Ginger as a brand has been significantly repositioned in the last couple of years. What we call the Ginger entered the lean luxe segment, and 10 of its properties were already refurbished, repositioned, plus the new ones that have been opening.
The second thing is in many other locations, it has benefited because it's got a strong footprint in secondary and tertiary markets. It was not having so much of competition for, let's say, a Ginger in Agartala was taking all the demand that was there in Agartala. A newly opened Ginger in Patna was doing very well. A newly opened Ginger in Kalinganagar is doing well. In Patna, it was doing well because there is Bihar elections. In Kalinganagar, it is doing very well because there was nothing else in the state of Odisha in this town.
A lot of Ginger benefited from that, but also Ginger benefited in places like Mumbai because Ginger was also hosting the medical staff. Ginger Andheri, Teli Galli, or Ginger in Andheri Mahakali did exceptionally well. Ginger in Margao in Goa did very well. Ginger in Panjim did quite well. There are different markets, different dynamics, and we think this brand will continue to do well. As time goes by, I've said it in various interviews and various conversations, it's a brand to watch.
It's still small. It has 75 hotels in portfolio, of which there are 51 in operation, but these are small properties. Now we will be doing big boxes or bigger properties, larger properties, and then you will see more and more and higher and higher impact as and when they open.
Okay. Very interesting insights. One last question. Once the business revives of hotel occupancies and dine-in restaurants, let's say six months to one year down the line, how would we look at these new initiatives like Qmin? Do you think at some point of time we'll need to invest in these businesses which we are seeding now? What could be our thought process?
What seems these are interesting ventures, but just once the occupancies come up, how will we look at these new initiatives, what we are seeding currently? Just some thought process behind that.
See, yes, this is not a short-term initiative for us. We thought through this, and that is why we developed our own app also for it. Qmin is now live in 12 cities. We would be going to 20+ cities, and we'll be doing several Qmin shops. The second one will come at the Ambassador in Delhi. The third one will be at The Connaught in Delhi. There will be a fourth one in Mumbai, but outside hotel. All these plans are already in place. As I said, this is not that now pandemic is over, this is over.
We would like to capitalize on this and take it to a professional level as a line of business. We never thought the need for it because the people waiting outside the restaurants was so many. There was no need. They say that sometimes you reinvent yourself when there is a need, and this is how this line of business came. This was a very large business even before the COVID. It was always there, the home deliveries.
Only hotel companies were not participating in it. Now hotel companies have come and become a disruptor for those who were doing it in this business, just like OTAs came and became the disruptors for hotel reservation systems.
Lastly, you would like to invest in this business if it is required. That is very clear. At some point of time, one year down the line.
We don't see any significant investment in this because we have the kitchens, as I said before. We have the staff. We have the connect to the guests. We have our own list of guests and our platforms where we have access to those people, whether they come through The Chambers, which is our club proposition, or they come through Taj InnerCircle, or they come through our strategic partners like American Express or HDFC or HSBC or I would say the entire banking world.
Or they come through any other source of various Tata Group companies. We have a very large base that is there. As I said, we want to get to a mature phase of this business and to grow it further. We have no reason to now stop.
Okay. Thanks and best of luck for the future.
Yeah. Thank you.
That's all from my side.
Thank you. We take our next call. Sorry, sir.
Yeah.
Please go ahead, sir.
No, I was just saying, I think we have five more minutes, I think. Just wanted to be conscious of time.
Okay, we have one last question, sir. Can we go ahead and take it?
Yes, of course.
Okay. Thank you, sir.
Hi, this is Archana from IDBI Capital. I have three questions. Firstly, on the corporate account side, what kind of discounting we should expect, if at all, when it will come for renewal soon?
No, I think historically our corporate business has been about 15% of top line. It's never been a very significant number in terms of corporate business. I think, and being in the segment that we are, I think you should expect that we are not going to unnecessarily discount because we do look at RevPAR leadership and we've always maintained RevPAR leadership. Hence, I think, yes, there will be some impact on pricing, but I think we will maintain our RevPAR leadership, and it's not ever been a very significant part of the business.
Sure, sir. That's helpful. Secondly, is there any change in our collaboration with the OTAs concerning current crisis time in terms of revenue sharing? Also if you can give us a mix between our customer coming from OTAs and our own portal?
Yes. Maybe Giri will answer this. We have gone the other way around and actually if you would look at it, we have with one or the other OTA launched a strong partnership and campaign because the crisis is a time for collaboration and not to keep diverting businesses and going into those kind of strategies. That's when you are already at an optimized level of 70%-80% occupancy, and then you want to get the last 10 through your own sources, right?
Here, if you're coming from a base of 15 or 20 and you're in the middle of a crisis, you have to synergize as an industry and come together. And I can tell you that the industry has come together very well in the last six, seven months and has worked jointly, whether it is OTAs or it's airlines or it is hotel businesses, and I don't see any change in that trend going forward. Over to you, Giri.
No, I think that's right. I think absolutely these collaborations are working. As you know, I think the OTA share is definitely going up as a result, and it will continue to grow. Nothing more to add from my side.
Sure. Thirdly, on the debt front, sir, how we should look at this number for FY 2021, and how are you planning to bring it down, let's say, three years down the line?
I think one of the things you know is that we are following an asset-light strategy. Therefore, I think the future CapEx in terms of investments are definitely coming down. Clearly, the future, it's very difficult for me to talk about what happens in the next two, three years, but definitely it will be a combination of continuing to pursue asset-light monetizations that we spoke about. We need to see how the business picks up in the next, what do you say, few quarters as we go forward.
All of these should help. If you see our net debt to EBITDA, I think it is still at around 0.5 or so. It is not as if that we have reached alarming proportions, actually. We continue to keep track and continue to remain focused on that. At this stage, I think that's probably the best answer I can give in terms of making sure that we keep a close track on debt and tracking it almost on a monthly basis, actually.
Sure, sir. Thank you so much and all the best.
Thank you. It appears there are no further questions at this time. Mr. Giridhar, I would like to turn the conference back to you for additional or closing remarks.
Thank you so much for participating in today's conference. While we are closing the conference now, of course, please do reach out to me for any further questions, and we will continue some of our investor dialogues in any case post today. Thank you very much.
This concludes today's conference call. Thank you for your participation. You may now disconnect your line.