Outbound business has been the fastest growing over the last few years due to increasingly global and progressive outlook of Indians, higher disposable incomes and attractive tour packages, said Anil Khandelwal, CFO, Cox & Kings in an interview with Myiris.com.
Excerpt from an interview with Anil Khandelwal:
Cox & Kings owned Meininger signed contract for a new hotel in Berlin. When this contract will start generating revenues? What is your projected contribution from this contract to financials of the company?
Typically it takes about 18-24 months to get a Meininger hotel up and running. We cannot share revenue projections at this stage. Our contract with FDM, however, envisages significant increase in bed capacity over the medium term.
Recently, the company reported turnaround in the March 2015 quarter. Could you explain reasons behind improvement in profitability? Do you think, the profitability will be maintained throughout this fiscal?
The company has had a strong FY15; net revenues (ex-Camping business) were up 16% y-o-y and EBITDA (excluding forex and ex-Camping business) was up 19%. We saw strong growth for the full year across businesses, especially Leisure - India, Education and Meininger. Whilst we do not give guidance on profitability, our margins in each of our four major business lines have remained steady over each of the last three years.
Net revenues saw a margin dip in the fourth quarter. However, sequentially there is improvement in revenues from the December quarter. Is there any challenges to improve sales growth? Do you think, FY16 will see improvement in revenue growth?
There is some element of seasonality in our revenues and earnings, i.e. the first half of the fiscal year is larger than the second half. The fourth quarter must therefore not be seen in isolation, or sequentially in comparison with the third-quarter. Whilst we do not give guidance on future revenue growth; however, we believe that there are many factors which may contribute to grow our consolidated revenues.
According to you, which segments will be key driver for revenue growth in fiscal 2016?
Leisure - India has seen a robust start in summer bookings. The stability of the UK pound, stable UK politics and higher tax-free withdrawals of annuities by UK pensioners this year may give a fillip to our Leisure - International business. Both our Education business as well has Meininger have seen good bookings so far.
How is the market condition in the travel industry? Is Geo-political tensions in Middle East impacting industry in big way? Is there any shift in preference for locations owing to crisis in Middle East?
The travel industry is growing robustly. According to World Travel & Tourism Council (WTTC), the sector has grown at a rate faster than sectors such as financial services, automobiles and healthcare in the last few years. The WTTC estimates global travel market growth of 3.9% p.a. over 2015-2025. More than 1.1 billion people crossed borders last year.
Geopolitical tensions are always a matter of concern, however, there has been no discernible impact on business as of now and we have not witnessed any material shift in locational preference.
Your comment on performance of Leisure Travel versus Corporate Travel and Domestic tours versus Foreign tours?
We cater to the diverse needs of the Indian customer, both corporate as well as retail. Our outbound business has been the fastest growing over the last few years due to various reasons; the increasingly global and progressive outlook of Indians, higher disposable incomes and attractive tour packages. Domestic travel is also growing at a reasonable pace. Corporate travel has been growing but at a slower pace than outbound.
MICE (meetings, incentives, conferences and events) business has seen very good growth in the last few years as the idea of MICE as a key business driver and enabler has now gone mainstream in Corporate India. gs (CKL) the international & domestic travel services company.