Q1 20/21

Aug 6, 2020

Good day, and welcome to the Indian Hotels Company Limited's q one FY twenty one earnings call being hosted by mister Puneet Chattwal, managing director and CEO, IACL, and mister Giridhar Sanjeevi, EVP and CFO, IACL. As a reminder, all participant lines will be in listen only mode, and there will be an opportunity to you for asking questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing Please note that this conference is being recorded. At this time, I would like to turn the conference over to Mr. Philippe Petwal. Over to you, sir. Thank you. Good evening, everyone. Thank you for joining us on this presentation of the quarter one results of this financial year. Let me begin with a piece of good news as we don't have much in the industry in general globally and also not on the Indian Subcontinent. The piece of good news is the Taj Mahal Palace and Tower in Mumbai was rated the number one hotel in the world by Trustview for the third year consecutively. I think being the flagship and the most important revenue generator for the company, including the EBITDA generator on the absolute amount. This is a piece of good news and definitely in line with what we have started to communicate of us being the most iconic and the most profitable company, and there's nothing more iconic than the Baj in Mumbai. Moving on to the difficult part of the news that this is an unprecedented downturn for the global hospitality sector, but also for the Indian hospitality sector. The estimated revenue in 2019 for the sector was about 1 lakh 60,000 crores, and the loss in revenue in this year is expected to be around 90,000 crores. More than 50% of last year's revenue is going to get eroded. With an occupancy loss of almost 32 percentage points, a RevPAR decline of 58%, and this is based on the information that we received on the HPS. This includes the nature of the organized sector. Let's say, 80% or more than 80% of it. And oh, sorry. 40,000 is in the organized sector, and this is the organized and the unorganized account for 8,041, respectively. Moving on further, given what we are facing as an industry, we don't know, like, I need to, you know, sharpen the saw, and we said we will reannounce our aspiration 2022 with the new goals as we had achieved almost 70% of those outlined in less than 50% of the time. This was not the time to focus on 2022, but more to reset what we have on our hands in 2020. And for us, the reset stands for revenue growth, e for excellence in whatever we do in guest experience and operations, the s for spend optimization, the next e stands for effective asset management, and finally, stripped and financially prudent. So these became the five very important part of our strategy in terms of what we're gonna be able to communicate in this quarter and the following few quarters. And some results are already yielded, and we will take you through those initiatives. The revenue growth accounted for $55 of revenue, which is coming from not like for like initiatives last year. The spend optimization resulted in savings of 52 crores. The effective asset management resulted in 22 crores and being served financially prudent another 90 crores. The research initiatives added 77 crores to the top line and 104 crores to the bottom line in the first quarter of this year. Moving on to the highlights of reset, if I may start first with the hotel occupancy, what we saw from March 20 to May 20 is unprecedented, and that's very evident. Also, when you see here on the slide, it's only after the May 20 that things started turning. But till twentieth or till May 13 and starting at March 20, the two months, very, very difficult on operational inventory or on total inventory. If you look at available total inventory because more than half of it was shut down, we were for most part of the month of April and the May, we were in a single digit occupancy percentage. And if we took an average from March 20 till May 20, that would still come to single digit. And this started changing around the May 20, and then we bring into higher followed by June. And the numbers cost more than 20% for us, touching 25. And on the on the operational inventory, we started getting close to even 40% occupancy. All these at very low rates because some of these rates are the source of the business were regulated by the government. But there is an interesting thing which is worth it in the next slide if you see. The ginger brand has had a far stronger rebound and has already crossed 40% towards the last ten days of June and also in the early part July, which is not a part of this presentation, but in terms of giving a trend in occupancy. And the the rest of the portfolio of IFC, Taj, Selections, and the Vanta are in are in the category of north of 20% occupancy. In terms of reset growth initiatives, which contributed 31% in the first quarter, that's your 55 crores. 44% of it came through the quarantine, one day, Bharat repatriation flight, another 25 to the BMC, you know, Bombay Medical Bombay Municipal Corporation and Medical Fraternity Bureau. We're posting on average more than 500 room nights per day in different properties of ours. And then some incorporated some very new initiatives, which we are very excited about. So some of our new initiatives launched even, you know, towards the June, like, we've launched delivery app in July. The home delivery business started in June. And also the hospitality at home in terms of selling hampers, that yielded almost 11% in this total. So that was very encouraging because it helped us create incremental revenue of $55 when you're coming from zero revenue base. Some of the other things on the after the revenue initiatives is on the excellence. We've communicated in all media in by way of videos, by way of videos in house, by way of videos and social media. In terms of Tajness, a commitment we strengthen as our company is known for the outstanding Tajness that it exudes. We thought the best was to communicate under the tachiness under the tachiness name as a commitment, which we have reached them and then come up with the new norms which comply with the Ministry of Health, with the WHO regulations, but also us taking some of those commitments to safety and security standards to a new level. And, that has been rolled out in all of our hotels that are operational, and you would always see that if you enter any one of those in any of the cities that are open to the guests. Very important, a few days ago, we also launched, or communicated the ICL zero touch digital transformation. The first pilot was done at Vimanta in Whitefield in Bangalore, and this is the digital journey of of the transformation that is needed in such times. Also, otherwise, I think digital plays more and more important role in terms of contactless checking, checkout processes, invoicing where you don't touch the invoice, in terms of menus, you know, QR codes, and and intelligent conversation platform. So I think this is a very exciting transformation that the industry goes through, and we are very happy and proud to be at the forefront of this. Moving on further, I think, is the spend optimization. When it comes to spend optimization, over 51% reduction was witnessed in q one in total expenditure. So I think I will take you through this in the details with a fixed cost of reduced by 90 crores and variable by $3.65. And our reduction in total expenditure comes 89% from raw material cost, which is obvious. If your occupancy levels drop, if your restaurants are shut, then the raw material cost goes down. But I think that the kind of business we had, we had a very strict control and renegotiation on all our vendor prices to come to this kind of figure of 89% lower raw material cost. Admin cost went down by 64%. Heatlight and power down by 58%. Fixed lease cost, which was renegotiated and we seek some we were able to seek some lease waivers giving us another 51% reduction and manpower reduction of 35%. So that combined gave operating expense reduction of 51% in q one. The secured the the the the waivers that we secured in terms of leases across all our brands and different companies, which starting with ICL at 22 crores, subsidiaries at 6 crores, group companies at 24 crores, total 52 crores, and the benefits received in q one for ICL and subsidiaries accounted net for 19 crores. Moving on further to the the some of the the challenges, I think we have been discussing some of the issues for a very long time. This this quarter, we had couple of significant developments where we were able to resolve or take the first step in resolving the legacy issues of Ciroc. Now we control 100% of the shareholding with SeaRock, and we'll have a phased payout on the remaining 15% that we acquired. But we also acquired 50% of the shareholding of Tata Africa, and now we own 100% of the large Cape Town property. And then we will enter into the second phase in getting the permissions and for for building the seal of property and task keep on in restructuring that investment. Moving on to the next slide, corporate overhead is a very important one. We saw a decline of 26% in q one because strict prudence was kept in all corporate expenditure. There was obvious reduction in sales and marketing activity because of the lockdown, and we have entered into serious redeployments and renegotiations on all fronts. So redeployment in terms of talent redeployment as some of the, you know, some of the call centers which were taking calls for 80% or 75% occupancy, the people were not needed in that kind of strength as an example, were redeployed, in other businesses and other group companies. And renegotiations definitely with the unions, which you don't see all in corporate, but you will start seeing very soon in the p and l in the following quarters in terms of wages, wage settlements, postponement, and coming towards zero base increase of basis. In terms of liquidity, ICL has taken multiple steps to enhance liquidity. We have secured debt lines. There's 500 crores of long term debt in q one. Additional lines have also been secured should there be any further requirement. We are very keenly exploring all monetization opportunities like in the previous two years. Only thing that will happen is a bit of acceleration on that front. However, the price has to be right. There are no bargains that are available as we possess some very iconic assets and properties. We are not in a rush like we were not there before. But monetization of non core assets for sure and monetization of certain assets and getting into a more asset light model remains the focus of the management even going forward. And any kind of non essential CapEx and renovations have been the part to preserve liquidity to the extent possible. Moving on to the next slide, I would say that here we have the q one numbers, the actual numbers versus q one last year. So on the quarter one, the revenue decline has been 83%. So we only did, you know, the decline of a massive decline of 83% on the revenue front. Operation operating expenses expenses declined by 52%. Depreciation level stayed the same. Finance cost stays more or less the same. And a PBT, which was a negative PBT of four two two versus a 25 floor positive last year. However, we had an exceptional gain in a couple of I think one is some shareholding we have where the shares went up. So we had a gain there plus a gain in acquisition of Cape Town, my colleague CFO will walk through in his presentation also. That resulted in a negative profit after tax of 280 crores versus a 6 crore profit last year. With that, I hand over to my colleague, Giritar Sanjeevi, who's the EVP and chief financial officer. Thank you. Moving on to the financial numbers. These are the detailed numbers. As has been just explained by the managing director. We had a revenue drop of 83%, but through prudence on cost control, we were able to reduce the different cost significantly, helping us with the total expenditure reduction of 52%. On finance cost, we were broadly in line. Exceptional items fundamentally represented an exceptional gain of 80 odd crores on the Cape Town acquisition because we had earlier written out and this is fair value under accounting standards we had obtained. And we ended the year with quarter with 280 crores of profit after tax of loss of loss after tax. Exception items I've just described is the fair change in fair value of derivative contracts, which is 4 crores and the acquisition of Cape Town, 82 crores. We did sell one flat apartment during the quarter, which gave us about 3 crores of profit. On a stand alone basis, we had a revenue of 117 crores as compared to 608 crores in the previous year. This represented an 81% drop in the top line. Like the consolidated numbers, we did see the reduction in cost, which was as much as 44 percent, and and therefore, which resulted in EBITDA of 140 crores negative. Finance cost was steady at 63 crores, and exceptional gain and loss was about 38 crores of the loss. And I will come to it in a second, leading to a loss after tax of 239 crores. As far as the exceptional items are concerned, as you know, the the whatever funding we do for Pierre, we do not allow it to below the investment block, and we always provide for it in the stand alone. So it was positive growth in q one, resulting in a net exceptional loss of 38 growth. The gain on sale of flats was about three growths. In terms of stand alone revenue metrics for April, May, and June, as you you can see that the occupancy is steadily went up from April to June at 33% and for the quarter at 20.5%. ARR was 7,600 in month of April. And then in June, it was about 4,000, largely driven by the kind of business we have, which is when we got it from the quarantine flights. The airport, obviously, was impacted as a result. Room revenue was 40 crores in in this, and F and B revenue was 20 crores. In terms of the debt position, we continue to manage debt on a prudent basis. The consolidated net debt as of June 30 was 2,358 crores as compared to thousand 950 at the end of the year at the end of the previous year, and the net debt for stand alone was a thousand $6.90 as compared to 1,400 crores. The weighted average cost of debt remains competitive at 7.96.9% for consolidated. Net debt to equity is still at point 38%. Net debt to EBITDA, of course, has gone up given the drop in EBITDA. Similarly, on consolidated, the net debt to equity was point 48%, and net debt to EBITDA was sent as compared to the previous because of the drops in EBITDA. So that that is really the summary of the presentation. Open for questions. Sure, sir. Thank you. Participants, if you would like to ask a question, please signal by pressing star one on your telephone keypad. If you're using the 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 company company they belong to before asking a question. We will would now also take request our first question. Participant, your line is open. Please go ahead. Hi, sir. Good evening. This is Nihal here from Edelweiss. I had three questions. The first one, obviously, you know, hoping you you could crystal gaze, just wanted your sense on the recovery part specifically. In your interactions over the last couple of months after we interacted in q four, I just wanted your sense. Do you believe that for things to get back to pre COVID or normal levels, is it totally contingent on a vaccine coming in? Or or how is the way you are seeing it based on your interactions that you've had? And your second question? Sir, the second question was on Ginger. As I see that we have been purchasing our remaining stakes in a lot of entities. So even in case of Ginger, we have a 36% stake which is owned by a PE owned by Tata. So what would be the arrangement for that? K. And the last one, Nehaan? The last one, sir, was on Siroc. And now that we have completed the acquisition of the 100% entity, just wanted a sense that do we have any firm plans at this point in time about the different possibilities of that parcel of land? Okay. So let me try. And, Gary, please feel free free to add as in when you want. There is there are three terms that are being used by the hospitality industry and all the associations, which is called the survival phase, the revival, and eventually, tribal. The tribal is the one which is linked to the post vaccine, and that may take anything between eighteen to twenty four months or thirty months is anybody's guess. Because it's not just when the vaccine comes rather when the people have also been vaccinated. Right? The question is on the survival. As I said, the toughest phase that the industry went through is now we could debate if it is from March 20 or March 22, which was Jantha, whatever, you know, lockdown or Jantha curfew, and then you had this lockdown on the March 24. Is it from that? But let's just keep to keep it simple, let's say it's the two months March 20 till May 20. And I think that was a very dramatic phase. We cannot count it as a survival. So since May 20 till, I think, August 20 is the survival phase, and the revival already started somewhere towards, you know, the the July. And there is an overlap. It's not like a switch on, switch off button that now it is survival, now it is survival, or now it is revival. So so the revival started albeit at a very low level, but, you know, it is better than zero because some of the hotels that are still shut are at zero level revenue for the industry. It does not matter there, but and in which part of the world, a lot of industries been shut down. So opening up already helps. So I think at the moment, we're in a combination of survival, revival phase. We, as management, feel optimistic that towards mid end September or latest mid end October, we will start seeing a pickup in the activity. I was yesterday at an event in touch in Gurgaon, and there was a lot of activity in the hotel. And that's what we're also seeing in in Mumbai in our properties, where it was good to go out of Mumbai and see it in another place too. So that answers on the recovery. On the Ginger, as you must have noticed, Niral, that since last two years, we work very actively on Ginger. It's repositioning. It's redesigning. And and, you know, Ginger is a commitment we made to ourselves as a brand, which we think has a great future over long term on the Indian Subcontinent, and that all is already being seen in the results. At this point of time, such discussions about having 100% control on Ginger is not there as we will need some capital if we had to buy somebody, whether it's a Ginger or another company or another joint venture, and we don't want to do it if if we don't if you're not doing it out of free cash flow. So that question does not arise, but we own the Ginger brand 100%. It's only the company in which it sits as the management company, which is a roots corporation, that you have another shareholder another couple of shareholders in it. So we are very excited about the future of Ginger. When it comes to CROC, yes, it is our firm belief that together with Lands' End and CROC, this is building the next icon for Mumbai just like hundred years ago, Taj Mahal Palace And Tower was built. This will happen. The only question which we might debate or, you know, which we would definitely would not be our choice at this point of time is to use our own capital. So our strategy will stay to use some partner to help us build it, and we would we would manage it. And that's what we have been doing. As you know, that the majority of our pipeline over there is contracted in the last two years. Based on that model that we said, we will be fifty fifty balance portfolio in terms of owned and leased versus fee based business, and that remains a clear priority for us. But we are very excited to quote this development, and we will now set the design and all the planning We'll roll in so that, hopefully, in foreseeable future, which is not foreseeable, I don't mean two, three, four years, rather, you know, twelve to eighteen month time that we get the permission so we can break ground and start going. Oh, that's very helpful, sir. I'll come back in the queue for further questions. Wish you all the best. Thank you. We will now take our next question. Participant, your line is open, please. Hello? Yes. Hello? Hello. Sir, this is Zakir. Am I is Zakir Nasir? Hello? Yes. Mister Nasser. Sir, I have two questions, sir. Number one is, like, you mentioned that the model of the hospitality industry, it was always based on centered around the price of property. So do you think this will shift towards the brand brand centric and service centric? That is my first question, sir. And my next question is a follow-up of this. Is that whether a hospitality company like Indian Hotels, would it not be better that it is it it run as a debt free company? And do you have any plans to make this debt free in the next three to five years, sir? Thanks. So I will answer the first part of the question and give an introduction to the second part and let my colleague answer the second part. I think your first question is a very interesting question, and I'm glad you asked it. The industry has already evolved into being brand centric and service centric. But the change that we are witnessing now and witness and we will witness much more strongly going forward is that the customers will go to the brand they trust. And especially our backbone is the Taj. Taj stands for trust, awareness, and joy. So, you know, from we have a strong belief, not just in India, but globally, it will not be in the short term. It will not be the the third party websites. It will not be other people, intermediaries, booking as much as they used to do before. Because people are hesitant to travel, but they are happy to take the risk and travel if they know which airline they are flying, if they know what destination they're going to, what are the facilities available there, and which property or which brand they're going to spend their time with. So I think there, we feel we are very well positioned. And so definitely that shift is also going to last for longer because brands in such time are more important than ever before. And and as you have seen that Taj was voted India's strongest brand across all sectors, I think we stand very well positioned. We got other brands too, whether it's a ginger or Vivant or Selection, but especially with the Taj, I think we are very well positioned to take advantage of that. In terms of being debt free company, yes, in an ideal world, one would be debt free, but a bit of debt always is good in structuring. But without without getting too much there into the detail, why don't I request my colleague to answer that part of the question? Thank you. No. That is in fact, I think if I look at the pre COVID world, think I we were always kind of managing debt, as you know, between 2017 to 2020 through various efforts. We were able to bring down the net debt to equity and the net debt to EBITDA. And in a pre COVID world, I believe we would have liked to bring it down to about thousand crores or so. And any case, our asset light strategy was helping. Our target was to go to 50% on an asset light basis. And on that, that could have required much lesser capital on the balance sheet side. On the p and l side, very clearly, we were driving through EBITDA margin growth. Now I think what is likely to happen is that the profitability targets in terms of driving through performance In fact, all our cost efforts are going to lead to a very different operating model and cost structures once the business recovers, and our asset light strategy continues. So our sense is that we will be very focused on this. That's why, you know, we're also monetizing assets, and that has always been part of our strategy. So a combination, I guess, of asset light growth, monetization, improved profitability, and flow throughs, all of these will help us in to keep the objective of keeping debt at optimal levels intact. Not sure as as as Puneet said, zero debt is the right solution, but a level of debt which is kind of small and meaningful is is really what our objective remains, actually. Thank you. Just just a just a add on question. Sir, I mean, in some parts of the world, we way we see hotel rooms uprise in India, we have not seen that happen as yet. For example, let let us take example of. I mean, if if the if the cost of the room and on an average is 15,000, and if you if you don't have occupancy, would it would would you would your thinking need you to give it at 7,000 so that you have a a optimum kind of occupancy? Would that thinking come into the pricing of rooms? Thank you, sir. Sure. Not just I don't know what makes you say that this is not accurate because, globally, revenue management has become a core part of any company's business, and the revenue management on the room side of the business from the food and beverage definitely is a combination of the right occupancy, the base occupancy, and the right pricing strategy. We always try to get to a certain level of base occupancy before you start moving rates. And if you're operating at 85, 90% of rents, you don't try to book it to fill the last 15% because that is counterproductive in the long run. And I think the industry actually has suffered in its ability to charge the right rates. So it is very important to maintain certain integrity with the rates, And and then it is better not to build very fancy hotels and spaces that are not used by all guests, which is also called the renaissance in hotel business because that has happened. And the norm room space is being built less and less in not in the five star category, but but definitely in what you call the upscale, the upper upscale, the midscale, or or in the the quality segment. And that will continue to happen, but revenue management has been a key focus for any serious hotel company having, you know, a world class brand. So and we have been practicing that very diligently. Thank you, sir. And on on on on the issue of stand alone hotels, sir, do you think in the post COVID world, could a stand alone hotel survive and thrive? Or it has to be necessarily be a part of a brand and a service network? So when you say standalone, you mean unbranded? I Unbranded single owner, single running kind of a place. I think it depends on the capitalization of their, you know, asset. And if they're capitalized, of course, we will buy it. So or, you know, that's not our business. I have seen is in the business of running our own branded hotels. Yes. There would be an opportunity for us to go for conversions because we do believe in six, eight, nine months from now. Hello? I think I think we I I mean, think, I think we are not able to hear you. I think Yeah. Yeah. Yeah. Now now I can just call back. Thank you. Hello? Yes, please. I think we were not able to hear you, sir. I think Were you able to hear me or not? No. No. For for a few minutes, no, sir. For a yeah. Yeah. I think it's yeah. For a few minutes, I I think it got Right. Right. No. I think, you know, the it will be a lot of trans access, you know, properties that will come onto the market and is also a good conversion opportunities for us. But it's not And then that's I will read to a lot of show that what is reality that that the health of this crisis has been so strong that it will not be an easy day. Thank you, sir. Thank you. We will now take our next question. Participant, your line is open. Please go ahead. Hi. Hi. Good evening. This is Akash from Antique. Thank you for taking my question. And the color you have given around reset initiative and cost management is truly great. My my first question is I mean, it's I just want your view. Once we are done with the pandemic, do you think the most property owners will prefer to partner with Indian hotels than many of the other players as the COVID would have by now made them realize the importance of being, you know, having a good partner. So what I'm trying to make a sense of, I mean, the management contract, I mean, it would be more in favor of Indian hotels once we are done with this pandemic. So the number three, if you look at what we were able to apply for pipeline was more seven years time and that it has I do feel that the group will also look at the group and work, especially, we have done in terms of serving the community has created a goodwill on the brand, which will help you. It has become totally different. And, definitely, the the empathy and sympathy factor for our company and for our group is very high because that is a poor value of the foundation of this group. So when does some sense since the jump ship, she's got a a a the community is not just another stakeholder class of the existence of any business. So I think The first time, the second one, then we still don't whole and takes the last level to a total different way of looking at the same time. We are already seeing look. They will be a management on price. It is about getting the share of the Yeah. Yeah. I think I got some part of it because your voice was going in between. If I can if I can build on what mister Chitvala is saying, I think, as you know, we were if you see the history in the last three years, we have been getting more than a 50% share of the management contracts. And the feedback from all our owners has been excellent in terms of the time and attention that we give and the access that is provided to the senior management. Unlike some of the other brands where they end up talking to a multinational manager who comes across, I think we have been very agile and responsive to the to the owners as well. So my sense is that this will continue in in the current environment as well. So we will continue to maintain a disproportionate share of all the new management contracts. Sure. Thank you. Did you and also so regarding the employee cost, I mean, I can see on stand alone, it's down 11%. On consolidated, down 37%. So where's the where's the disconnect there? Because, first of all, you know, I understand, you know, Tata's were pretty accommodative to employees and and vendors. But where's the difference between that stand standalone and consult pages? Why consult number and so forth? No. Essentially essentially, what's happened is that our ability to sort of manage the cost in in the London and US especially has been very significant. As you know, in London, the government came up with a subsidy plan where employees earning up to £2,500 where where 80% of the cost was subsidized by the government, and that scheme is still going on. Albeit, it will get it will taper down for the next couple of months. But that has been a big implication. Secondly, in The US market, what has happened in the New York Union, the New York Union rules have allowed hotels in New York to sort of furlough the union employees for a period of six months paying only the health care insurance thing. So we have been able to take advantage of that. So so so the significant cost savings on the labor front have been achieved in these two markets. Even in India, I think we have been we have been very careful. I think there are three classes of employees, and as the chairman also advised in the AGM, I think as far as the contractual employees are concerned where we deal with agencies who appoint them, we have been working with agencies in terms of managing the headcount. As far as the fixed term contract is concerned, we have ordered all the contracts. At the time of renewal of contracts, we have been taking a case by case call. And as far as the full time employees are concerned, people have taken pay cuts up to a certain level in the organization. And that's been the approach in terms of managing the employee costs. And you will see and and we're also working on redeployment, working on different operating models. All of these will come to bear fruit in the next few months as we go forward, actually. Sure. That's helpful. I I just have one last question. What is the overall debt level you are comfortable with in case the occupancy remains subdued for your time? Then expect it. I mean, so so what point you will maybe accelerate the sale of Monco assets or we look at the divestment divestment? And and also if you just give me the CapEx levels you are targeting for the current year. That's about time. Yes. No. No. Fair enough. Fair enough. I think as far as the debt levels are concerned, very clearly, this is a very big focus area. And I think it's a combination of the monthly spends and the CapExes and all. So at this point of time, as far as the debt level is concerned, what we believe is that monetization will be a very key objective, we are in discussions on monetization of some properties. And our idea is that whatever we monetize, we will use it to reduce debt actually. So that is something that we would do. As far as the debt level itself is concerned, I think I mean, I would simply say that you've seen the thirtieth June numbers. I think our debt to equity is still at a manageable level. So I suppose there will be some increase in debt, but with monetization, hopefully, by end of the year, we should come back to meaningful levels, actually. So that is as far as debt management is concerned. The second question sorry. I missed the second question you had. What is the CapEx level you are targeting for the current The CapEx level is a combination of two things. One is CapEx, which is the current year, which is really marketing and whatnot, etcetera. And the second is the payments from the previous year. Combined together, we think that the expenditure may be approximately about 250 crores this year. Okay. That that's helpful. That's helpful. Thank you. We will now take our next question. Participant, your line is open. Please go ahead. Hello? Hello? Hello? Yes. Your line is open. Yes. Go ahead. Yes. Yeah. Hi. Sumant here from Motilal Oswal. So, sir, can you discuss more on US and UK hotels, the the hotel open? How what is the occupancy and all? Yes. UK hotels have just opened. I think the Jamesport just opened on the July 4 under the garment rules. At this point of time, the business is slowly coming back Mhmm. At this point of time. So in q one, for instance, we had an occupancy of, like, very nothing because it's only the July business. So Q1, there's no business in such export. Similarly, in the Pierre And Camden Place also, it was minimal business. So therefore, I think the real opening up of UK will happen from has happened from July. And as far as Pierre and Camden, we think that by September, Pierre should open Camden by October. So I would say that you would start seeing the business happening from the second and third quarter from the second and second quarter is what I see. So US US, you said the opening in July? No. June no. The pier? It will open by pier will open by September. That's the current thinking. And Campton Place sometime in October. October. Okay. And UK hotel already started? Yes. July 4. Yeah. July 4, the calendar. Okay. So when talking about overall, the total room, how many rooms are operational currently? I'm talking about the ISCL and include and subsidiary, not group level. How many rooms are operational? I think It's around 14,000, Giri. Yeah. Around 14,000 as we speak now. If we include all all brands, so there is around five, six thousand that is still not operational. Okay. And what would the management contract rooms Is under is under operation? How many rooms are operation? Is you said 1,400? It's own hotel. Right? 14,000. No. I said 14,000 total, but we can send you that information if you Okay. Okay. Okay. No problem. And have it ready. How many in management and how many in lease by brand, by country? We don't have that. Okay. Okay. Okay. We have any input on this call. Okay. Okay. And can you discuss more about the how is the actual the customer mix currently, and how is the actual demand coming up in particular geography like Goa and Bangalore and any other market? And overall level, what is the mix of the the actual demand or actual customer, you can say, ex quarantine? Right. So some of the initiatives that were launched based on the opening and closing it, you know, of the markets, they were able to show results. So when we launched the four d experience as an example, which was you dream, you you drive, you discover, and you delight yourself. When we started, it went very fast and there was a lot of pent up demand or the revenge travelers, people call it. But then a few days later came the lockdown from this was from Bangalore going to Kurk. So we launched it first in Karnataka. So it was very strong and suddenly the lockdown was imposed again, so it dropped. But at the same time when we launched this in Rajasthan, you know, Udaipur is one of the biggest beneficiaries, followed by Kurga, as I mentioned. The third one is Jaipur. So so there is a there is a lot of demand which is not seen historically, you know, people driving to a destination. So there is tourism or leisure is the one which is leading. Business travel still remains very subdued unless you're talking about a ginger branded category of hotels. And and that is also right because your business travel has to come in cities like Delhi. Business travel will be taken charge by cities like Mumbai, the the the national capital and the commercial capital of the country. Right? And if both are not fully open, then the business travel remains subdued. Goa has some difficult quarantine challenges. So Goa, at the moment, is subdued. It's still at number three for us or number four for us, but we do feel it can go up much faster and much higher depending on when the quarantine rules are relaxed or they become a bit, you know, in line with other different states of the country. Okay. Okay. Thank you. We will now take our next question. Participant, your line is open. Please go ahead. Good evening, sir. This is Deepika from JPMorgan, and thanks for taking my questions. Was saying, this is regarding this point on, you know, the customer mix. You know, barring f y twenty one, do you foresee business travel to remain subdued for longer? And as a result of which, you know, do you see other, let's say, lower margin customer mix basically gaining share and hence impacting RevPAR even twelve months out? Not really. I think the day we get the communication right in all the media in terms of travel is safe, and the industry is working collectively on it. I think one of the industry colleagues from MakeMyTrip did a very good video on that. We're going to push those efforts very strongly collectively as an industry from all, you know, branches of tourism, not just hotel business. For some reason, you know, hotels have been not treated the same way as airlines or shopping malls or stand alone restaurants. But I do believe that this should come, shortly. This opening up should happen within the next few weeks. It's quite imminent. And once that happens, the business travel will start coming back. People have to feel see, it's a psychological thing. People have to feel comfortable that it's okay to travel. People have to feel comfortable that the number of cases in in the capital of India are limited to one thousand and are going down consistently. People have to feel that the the curve is flattening in Mumbai and it's a sustainable thing. So once people get used to that, I think they will also start traveling and people will travel with precaution. At least that is definitely started happening in Europe. People are traveling, but they're taking all the necessary precautions, and I think it should soon come here too. And it's also happening in parts of Southeast Asia. It's not that it's not happening there. Got it. So if you could give us some color on I know it's early days, but towards July, August, what are the occupancy levels like both for ginger and for the luxury brands? And just to just to follow-up on that, on your aspiration 2022, May maybe it's a little early, but are you looking to still maintain all those targets of 800 bps margin improvement and 23,000 rooms? So let me start with the last one. That 800 basis point margin improvement we already achieved at the end of thirty first March. If you look at that, it was twenty five percent and twenty three thousand rooms as a total portfolio was also more or less achieved. So that's why we thought it's not the time to keep counting rooms. It's the time to focus on the current thing and that's why we came with the reset. So if you go back and look at the last financial reporting, you'll have all those numbers in there. And that's why I said that we had achieved already 70 to 75% of all our goals of aspiration 2022 already at the end of the financial year 1920. So we do think we will provide guidance or fresh guidance at the end of next quarter. Okay. Sir, any update through August? Yeah. On August On the the occupancy you wanted. Right? Yeah. That's the occupancy levels, as I said in the presentation. Ginger is kind of around 40% or higher, and the rest of the portfolio is north of 20%. Now that is all available inventory. If we were to look at hotels that are allowed to open, then there are hotels even operating today as we speak at 80% occupancy, but at lower rates. So there are a lot of hotels which is and that's the maximum they can have. For example, in city like Mumbai, because of the lockdown, we are not and for safety reasons, we are not allowing the staff to go home. Either they're staying in nearby locations or they're staying within the on the hotel premises. So we can't have more occupancy because the rooms are occupied by own staff also as it is the safety and security of our associates is of paramount importance. And if they are safe and secure, our guests are safe and secure. Got it, sir. Thank you so much. Thank you. We will now take our next question. Participant, your line is open. Please go ahead. Yeah. Hi. Good evening, everyone. Thanks for the opportunity. So I had a couple of questions. So first of all, what I wanted to understand is that, of course, the cash is is the king, and and and everybody is is sort of dying to preserve cash. But in the same in the same context, don't you think this is a good time for the for the conversions because you get the cheaper properties? I mean, lot of consolidations are happening, and a lot of people are dying without cash. So so what what is your view in in this in the same in this regard? Do you think it's a good time to convert? Are you planning to do more conversions? So what the how how does the situation look like? Gary, you want to try first? I'll add later. Yeah. Sure. No. I think I think I'll understand there are two parts to the question. I think part number one is the whole conversions in terms of management contract. It is absolutely clear that in times like this, the conversion opportunities are greater in terms of hotels which are operating and owners switching. So that is definitely one part of it which we are pursuing. The second part of it, if you're talking about acquisitions, clearly, there are stressed assets will are are going up, and there will be opportunities to acquire. However, such acquisition has to be done with the right kind of money. It cannot be done with debt. And to the extent that we can also leverage our platform with JFC, we could do so. So we are not lost. We are not losing sight of those, but we'll have to do it at the right time. Right. Okay. The other thing what I wanted to understand more about the customer mix, following on the on the last on the recent question. As you know so, the corporate, travel is not happening at the moment. And and and as you rightly said, that occupancy is more in the ginger brand. So does it indicate that that, the high paying customers like the corporate, like the international travel, I I mean, so international travel international travel happening in India. I mean, those are the guys who pay a higher rate and and and, you know, as compared to with the otherwise, the general customer. So do you think the RevPAR would remain under pressure even going going into the FY '21 sorry, FY '22? Yeah. I I don't I don't believe that would be the case. I think on the contrary, it depends what the balancing act on the demand and supply would be. Based on some of the surveys done, especially by HPS, which was shared with us, the CAGR on demand is expected to be at 3.3% between 2024, and the supply is a little less than 2.8. And this is something different than the previous financial crisis where there was a lot of supply coming on the market in 2009 and 'ten and 'eleven. So that is one. The second is, at this point of time, is they said it is uncertain how much of the supply may continue to function as a hotel or might be used for alternative uses. So it it that will depend. The likelihood that it comes back stronger is higher than the likelihood that the RevPAR stays subdued for a very long time. As I said before, all the figures that we are reporting are on hotels as if all of them were open. If we started giving a report on hotels that are actually operational, the occupancy levels are quite high. Yeah. But but then, I mean, no, I agree on on your point. And then you are you are sort of trying to look at the demand and supply, and then and then, of course, I I I agree with your point. But then the the demand which you are talking about, isn't it the the sort of lower paying customers who are who are actually staying in the hotel? I mean, so, of course, the quarantine and all. But otherwise also, don't you think that kind of demand is there? I mean, not the high paying passengers because more of international people and then more of a corporate people and all. So don't you think that is the case? So that, of course, will that's what I'm saying. Today, this is what is there, which is not bad in the survival phase of the industry, but it will start to revive once the lockdown start getting lifted. Now either we believe that lockdowns will be now for the next six months, then that demand is not going to come back. I personally believe that the phased out lifting of lockdowns has already started happening. A few days ago, Guwahati was announced to have opened. Mumbai already kind of has seen a phased opening. We are already talking unlocked three point zero. So I do believe in the next few weeks, unless something happens that we all don't know today, With the opening up of the markets, the normal level of demand will start coming back. Albeit slowly for the first six, eight weeks, but then it will gain momentum. Right. Okay. Okay. The other thing which I wanted to understand, if you could and if you could please help me so so basically, when you look around the world and and then you go to Europe and then you go to the sort of US and you go to even China, people are actually avoiding air travel, and then they are they are looking for more for vacation kind of thing, and they are sort of driving down to the newer places. How's that trend happening in India? Have you have you noticed that kind of trend that kind of passenger It's the same. It's the same here. See, you can't man is a social animal. You can't lock down human beings for five, six months. And if they want to go out, they will go out. Right? We have seen it in a very negative fashion when, you know, some shops were opened in Delhi and how people lined up without maintaining any social distancing. But now to come to concrete staycation, drive cation, you know, people driving taking driving holidays. This has started happening in the last few weeks. It wasn't there as strong, let's say, April, May, and even parts of June, where the real demand was coming only from the Vande Bharat and the, you know, the quarantine guests and the medical staff. But of late, are seeing these green shoots. And also we did in some of our places in June, we did do some weddings. Again, up to 50 persons only as allowed by the government, but you'll see it it it starts changing and we are seeing some trend. Yesterday, while talking to my heads of operations in our company, my colleagues, we got confirmation that we are seeing some very good signs of large weddings again happening. You know, large when I mean in terms of the volume of payment, you know, the kind of service and the kind of attributes they want. Again, in Rajasthan, as an example, in destination wedding. But they're like three, four, six months out, you know, when the wedding seasons come and when those windows dates are available. Right. Right. And staycations for people who are in the same city would check-in into hotel, you know, if we saw that happening very much in Bangalore, We have had first few queries of that in Mumbai, in in at the land's end especially. So there are things like this that are definitely happening. It's a it's a common trend globally. It's not just a trend in China or in The US or Europe. Fair enough. Fair enough. I also wanted to understand about your mix between F and B and room with the new initiatives which you have which you have taken the home delivery and all. Or otherwise also I mean, so if I'm in if I'm in a move and I don't want to stay at the at the hotel, but but, of course, having food, I mean, probably it's it's safe and then it's it's a bit of outing. So in all those scenarios, do you think the mix between f and b and room revenue could change? Or or do you do you think I mean, that's not that's not gonna happen? I don't think over long term the the the change will be that dramatic, but I'm glad you mentioned about the home delivery that is, you know, we have built our own app. We are not using a third party so as to, you know, have drive higher margins. And we have already opened in five cities. Five more will follow over the next five weeks. And the app, which has now been launched in Mumbai, will be launched in four more cities. So eventually, in all first 10 cities. So at the moment, we are operational in Kolkata, Chennai, Bangalore, Delhi, and Mumbai, and then five more will follow. So so very positive, very excited about this part of the business. It's not you know, in the pre COVID world, maybe it had a potential of less than seven to 10% of our of of our total revenue. But on the bottom line, it is far higher because everything is incremental. You know, you're not building new kitchens, you're not adding new staff, you're using what you have and and it's being delivered to people's residences. So so so I think it's it's a high margin business and and very exciting because at least people are getting something brought, you know, brought to their residence. Giri, you want to add something? No. I think I think what is very good is that when we started hospitality at home and also the human, I think the hospitality at home, the pricing was 5,010 thousand. Even human, the average ticket size has been maybe around 4,000 or so. So these are all high margin businesses. So I think I think it's good to see that. Right. Right. Right. I have two more questions. I'm really sorry for the long list. Have two more questions, actually. So one is about the cost. If you could please talk more about cost. So as you rightly said, in the first quarter, you cut down the cost by 52%, other expenses were down 60%, employee cost was down 35%, and all those sort of things. So how how should we expect these costs to evolve over the next quarters? I mean, so do we of course, I mean, as as the as the business comes back, as you start opening more hotels, as you so so your cost will start rising. So how do you see the cost evolving over the next few quarters? And the second question, I also wanted to understand, Puneet just talked about the demand and supply. And, Mr. Sari, I forgot to point to to point out at that point of time. So do you expect this year demand and supply both to grow year on year? So how the demand and supply situation looks like? I'm sorry if I if I missed something on that. Thank you. See, I Gary, you can take the second half. The the first half is this is in a where, you know, there is always some something good that comes out in in every downturn or in every crisis. And in this crisis, I would say for the industry in general and for us also in particular, we have been able to reset the cost base. So a lot of these cost, if you think they're only variable cost that have gone down and the occupancy that comes back and the cost will go up, that is not going to be the case. We'll be working out of a different cost base going forward. And I think even if we get to 80% of the revenues that we were at we have achieved before, it will it will come to the same margin level as we had before because of the readjustment of the cost base. Yeah. Mhmm. I think the operating room just just think about it from the new standards of hygiene, social distancing, etcetera. In the spaces that we have, now you don't have the same number of seats in a restaurant like we used to have before. So you don't need the same kind of of staffing, cleaning, heating, air conditioning. It automatically starts going down even if the restaurant was full. Right. Right. Right. So but I was I was talking more on different fronts in terms of security, in terms of heating, lighting, power. You know, they you you get smarter after every crisis. So so and and about the supply demand, if you could please give me some bit of I think I I think I think as we spoke earlier on supply demand, I think very clearly, basis the HPS report, are definitely seeing supply being lower than demand. And also in terms of new supply, which is coming up, we do see that because of maybe funding constraints and all that, we did definitely see slower in supply happening in the in the at least for the next one year or so until there is better clarity on funding availability and things like that. And as far as demand is concerned, right now, of course, the demand that we have seen in the main cities of Bombay and Delhi have all been more the quarantine and and business kind of demand. But as the as the leisure travel picks up with our four deals and and and all the other initiatives that we've launched, I would say that demand pickup will happen more driven, I suppose, by leisure. And with air traffic, air travel becoming more and more people start getting more comfortable with air travel. I think the business travel also will pick up The main season is still ahead of us. Yeah. Yeah. Yeah. Yeah. Perfect. Thank thank you so much, and good luck. We will now take our next question. Participant, your line is open. Please go ahead. Yeah. Good evening, sir. Thanks for giving me the opportunity. I'm Kostuk Pawaskar from Sherkhan. I have two questions. Sir, post pandemic, as we see that once demand start recovering and everything is in normalcy, should we expect even the room rental to go go Should we expect is there an opportunity for, you know, large hotels to increase the prices considering the fact that, you know, as you said, travelers would be, you know, more keen to go into the Prestige brand? So is will it give an opportunity like player like Indian hotels or large player to increase the room rentals? It should give the opportunity opportunity in the medium to long term, but not in the next few quarters. Right? I think at the moment, if we get that kind of customers coming in who are willing to pay higher, we are very happy. And that happens when the business travel picks up or high end leisure. High end leisure, we have seen some green shoots, but we have to have some form of business travel because of the nature of the business travelers end up paying more. And also meetings and events, they have to start. So eventually, it will the ability to charge for any trusted brand, as we said before, is going to be higher than for anyone else. So I do believe that in in a period of nine months, ten months time, we would have a higher ability to charge. This is assuming, you know, things open up in the next two, three months time. And the six months thereafter, it it will start showing what you asked in your question. Right. Right. So same thing I was just asking, like, you are expecting a recovery in September. So maybe post, you know, the vaccine or when when we might actually start, you know, seeing a proper grip, there should be an opportunity for, you know, the increase in the room rate. So my second question is with the recovery in the room demand, should we also expect the FNB part should also recover or it will take some more time for FNB business, you know, to come back on track? No. I actually, first, I have to correct. What I said was I expect opening up end of this month or September, and then it will take always around six weeks for any business to pick up. So if the lockdowns are are over, it will still take four, six, eight weeks for business to to restart. And once that happens and then you get into the wedding season, it will be fine. F and B is is a very important source of revenue on the on the Indian Subcontinent and I think it will continue to be. We don't see much difference in f and b going forward. As I said before, people will go to the place they trust. They will not just go to any other restaurant. Whether it is a standalone or it's in a hotel or it's a part of some chain of restaurants, if they trust the place, if they trust the people who are serving them, if they trust generally, the the atmosphere, they will go there. Thank you. Pleasure. We will now take our next question. Participant, your line is open. Please go ahead. Hi, everyone. This is Charlene from. Actually, most of my questions are already answered. Please just one one confirmation on what's our monthly cash loss right now including the finance cost, and how much is our cash balance? Sorry. What are the monthly cash? Monthly I mean, I think monthly cash is approximately about I would say, currently, we are spending maybe about 100 crores or so, including CapEx, including all of it. You know? I'm not it's not just operating itself. So that's the cash run rate, actually. And we have adequate cash, I think, and we have lines of credit. I think between cash and lines of credit on hand, it will be about thousand close plus. So I think so we are fine in terms of liquidity. Alright. Alright. And and we Puneet, on on the operation front, right, so as Puneet has already you know, it takes six to eight months for for any business to stabilize kind of thing even after opening. Since we have cut down our cost significantly, what about breakeven occupancy level at the hotel? And ballpark, what percentage of hotels are at breakeven level? And if if you can share this, ma'am, I don't know whether it's handy with you or not, you know, any sense for us to, you know, make assumptions, whatever you can you can share. Yeah. Shalim, it's a very difficult question to answer because, you know, the breakeven point for a Taj or a Vivanta or a Ginger or Selections is not the same. So if you put everything in one basket, maybe it's around 42 to 43% occupancy at a system wide rate of around 5,000 rupees. So that would mean a a RevPAR of around 2,500 rupees is needed But this is only the rooms part. Then you need again some activity on the f and b side also. But I think if we only looked at I think if we looked at a total revenue per available room, then we have to look at around 4,500 rupees to have a breakeven on Taj Selections and Vivanta brand. And on a Ginger, we could easily do it at 2,002 thousand 200 level. So I think it's important to look at total revenue per available room and not just the room rate and the occupancy part of it. Fair point. I completely agree with you. Another question. Any Sorry, Shalini. And if you are like Giri said, if you are in The UK or in The US and you get all the subsidies from the government and payment for the employees, then the then that number can change significantly. Right? And the waiver in property taxes like they've done in The UK, so it sometimes it becomes a big cost. So so it's a it depends. It's by geography, it's by brand, and also by contract type. If it's a management contract, then it's only a question of how much lower or higher your fees was as you don't have all these costs. So your your breakeven point is more on the the fee income derived versus a service provider. Right? Fair point, Puneet. I agree with you. One more question and and something related, and and if you can share up to you. As per your internal assessment, what are the operating metrics, either revenue size or the occupancy or RevPAR, etcetera, whatever? Yeah. You need to come to come at EBITDA breakeven levels. You know? Because I don't know, you know, how you're operate you know, if you open new hotels, it may you know, you have to take you have to be decisive of whether you want to operate all the properties or you want to be selective about it. So, you know, what are you looking at it? So, Shalin, I'll answer the second part and the first one because it's Gary's favorite, and he's just done a presentation today on that. So I'll let him do that. The second one is, as I said before, with the exception of Cannot in Delhi Mhmm. And a couple of ginger properties, everything is on a management contract basis. So the cost to us out of pocket for opening, launching, setting up is not there. So that is and and Cronaut is relatively a small property, 100 rooms only. So we don't have so we are actually looking forward to the growth because all that growth should be EBITDA additive. So it will add on to the EBITDA. It's not going to create losses. So there is a as we said, there is a there is a rationale behind why we went for this kind of growth in our pipeline. And, Gary, maybe you want to give a level at which we are both EBITDA and PAT positive Yeah. For neutral. Yeah. No. I think, obviously, EBITDA neutrality and and is it a consolidated level or maybe fat neutrality at a standalone level is obviously the standard that we're all kind of seeing what will it take. And I guess it's the combination of recovery in the third and fourth quarters and also the kind of monetizations that we can do. I think both are gonna be very important. My sense is that at around the 50% occupancy level, we should aim to get closer to the return neutrality at the consolidated level is what it looks like. And Yeah. RevPar, please? RevPar means? RevPar RevPar will be what it is. You know, I think I think it's it's more driven by I mean, I guess, what is the the performance vis a vis the previous year. So I think in terms of what I would say is that that at 50 level as compared to the previous year, we should definitely aim. I'm not saying we are there. Took some get to be with the they keep in for the consolidate. As far as standalone is concerned, I think I think it is more appropriate to look at that neutrality, but that depends on operational and nonoperational incomes. Operational, of course, the business service and nonoperational based on monetization. So we'll see. I think I think I think both these factors are important. Think, you know, chlorine, q q q q four, and the monetizations. But those are those are what we are kind of aiming for in any case. We'll see how far we get there. Yes. Alright. Alright. Great. Just last one. Just last one. Obviously, we have renegotiated leases, etcetera, and rentals. Have our partners have also re tried to renegotiate management contract with us with us? Are there any cases like that? Of course, Charlene. There are always cases like that. There's also an opportunity because, you know, maybe maybe they they don't nobody renegotiates and say, I'm not going to pay. That's not the thing. What people try to say is to protect liquidity or cash. So what can be done? And maybe if we can give them that and get something else, then return is good. There's nothing like a one-sided way of negotiation. That that doesn't work because we don't have we don't own the assets. There is no upside to us. Right? And the fees that we charge are very much in line with the market. It's not that we are charging, like, 50% higher fees, so we start reducing it. So I think the ethical way of doing business is appreciated by owners and partners. And and especially with, as I said before, with our group, that level of integrity helps us also in a crisis. And there is not one kind of formula that you can apply. So if we have a forty plus year partnership with with royal family in in Rajasthan on a management contract basis, it is of a very different value than having a management contract in South Of India or in Northeast in a secondary, you know, market for a hundred hundred and fifty room property. One could be an iconic asset well known globally and the other one, it is not really that much, you know, brand enhancing and and and something which leads your branding charge or creates the halo around the brand. So and also not such a long term relationship. So to last for relationships to last forty years, fifty years, it's it's a very long time and those people need to be treated differently than where you've just started. Right. Right. It's a it's one set, one one one kind of contract at a time, and there is no one size fits all. Got you. Got you. Right. Thank you so much, Puneet, Kiti. That's it from my side, and best of luck for upcoming quarters. Thank you. We'll now take our last question. Participant, your line is open. Please go ahead. Hello. Hi. This is Vinod here from Templeton. Am I audible? Yes, please. Hi. I just wanted more clarity on your cost cuts that you have planned now. You know, that's in a stand alone business. You have 44% drop in costs, 45% per room basis, but it's a mix of both your own cost cuts initiatives, also inventory not operating. Purely on let us say, inventory was back, what would that number look like? The other way to put it is once let's say, after second quarter, where would the cost per room be vis a vis what they were last year? Yeah. I would let Giri answer that question as is the but I would just say one thing. You know, when we started with the lockdown, nobody expected this to go on till August. Right? So the first date that was announced was till April 13, which was then extended to April and has kept getting extended. So maybe the agility in q one on cutting cost was missing to some extent. By that, what I want to say is that in q two, you will see a much more improvement in also the cost initiatives that we have taken or the spend optimization initiatives that we have planned. As the first phase, you know, it was like a wait, watch and see and maybe after thirteenth April, everything will open or after April, everything will open. Then there was communication from the government which was first communicated then was, you know, there was a different ruling by the Supreme Court that you have to pay salaries, you have to know whether I I think you all recall that. So that definitely has certain impact on the q one cost structure, which is going to be maybe a little bit reversed in the q two. With that, I I hand over to Giri if you want to elaborate on that, Giri, or add on to it. No. That's fine. I think I think I I think building on what we said, I think very clearly what is happening in the cost is that we are getting into much more sustainable kind of model as people are learning how to operate at a lower level. So as opposed to purely tactical steps in terms of cost control, I think it is now becoming strategic. Example, if I give you if I talk of shared service centers, now shared service centers will start it, but now those will get accelerated. Digitization is getting accelerated. So some of those initiatives are getting you sort of do online, what do you say, check check-in, check out under the ISS, which is contactless. It will have an implication of the manpower which is being used. So I would say that cost difference are moving from tactical to much more strategic, and that is definitely going to have an impact. The second thing is that as the hotels come back into operation and as business picks up, we will also see some of the other revenue lines also pick up. Example, chambers, for example, you know, that they represent some of the safest places to meet. And so we believe that some of the chambers that use also will start picking up. So I think it's very difficult to just look at one part of it. So my sense is some of those initiatives also will start picking up, actually. And, also, as we open hotels, we have now learned how to operate hotels and the ability to switch on, switch off in terms of loads and and also clustered approach where certain hotels will be more occupied than the others. I think those are being done in a very significant fashion. In terms of supervision, as I've been moving on to the fundamental thing what I spoke about. In terms of supervision, I think the supervisory frameworks are getting modified where I think you will find we will much go to much more cluster operation. Training of people is changing. Right? People are being multiskilled training where they can not only do housekeeping, but also do front office, bankfills, etcetera. So some of those, we call them the a team. So those are also being implemented. So my sense is the quality of cost control is definitely changing, and you will see that come through as we go forward as well, I would say. Sure. So from what I understand is that, a, the cost controls were implemented during the course of the quarter and therefore only reflecting for the part of the quarter, and that will see the full quarter impacting two q. Second, is it fair to say whatever controls you have to apply, whatever cost cuts you have to do, you know, it means all of that. So the number that we see in February would be the full quarter sustainable cost control that you will see. You don't have to put in more initiatives now. No. No. No. No. No. This will be ongoing. You know, this is not there are certain things you can't do immediately. So a lot of initiatives are there. They have taken place, but it will be built upon and also it has to be seen in line with a certain level of occupancy. So I think the real metric starts coming once we start hitting 50% occupancy level, which we hope to do easily system wide in Q3. As I said, in certain hotels, we're already operating north of 70% and in some even north of 80% occupancy, the hotels that are operational. So we will have those impacts. The negotiations are still ongoing with several partners, landlords, etcetera. It's, you know and also sometimes you have to look at till what extent this lockdown is going to be, so you get the right outcome. So some of the so what you see is maybe already 70%, 30% has to be done and it's not that easy. Certain things are negotiations with the unions, etcetera. So things take time and and you will see more important test is q three and q four. So q two should be an improved number on q one and q three, q four will be a further improvement. Right. If I may just follow-up on the same thing, let us say in in fiscal twenty, you had about an OpEx all put together, know, F and B employee other OpEx above EBITDA line of about 4,500,000.0 per room for the year. On a percentage basis, in q three, when you expect to hit 50% occupancy, what percentage reduction can we look at in the OpEx per room? Gary, I think we have reported 52% decrease in Correct. In in that. That is because of a low occupancy level. You know, we had a revenue decline of 83%. Right? Correct. Correct. So once it starts going to you you have to look at I mean, we can give a guidance, but let's put it this way that a lot a lot of work is still left to be done. It's not because the efforts have not been made, but the efforts have been made, but certain things will happen with time, especially they've got accelerated in Q2. And there will be certain impact coming in q three and q four, but it's very difficult to make that forward looking statement. What all we can say is whatever you see now, you've seen mostly on variable cost, but you will see certain changes coming in fixed cost also. And I think Giri had mentioned something. As an example, I give you redeployment. So if your hotels are operating at 50% occupancy and things open up and we start opening again a couple of hotels a month, then we can redeploy some of our staff. Right? Today, if they're all shut, what can you redeploy? And that's the opportunity we have because of a very strong pipeline. Right. That explains. Thank you for your time. 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 any additional or closing remarks. No. I think I would just thank the participants to who have dialed in It's been nineteen minutes. We are, of course, available to answer other questions. Do write to us, and we will also be, you know, doing the usual investor meetings in any case during this call after this. So thank you. Thank you. Thank you, everyone. Thank you. This concludes today's call. Thank you for your participation. You may now disconnect your lines. Thank you.