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Liquor sale ban on highways to affect 30% premium hotels, says Crisil

LiveMint logoLiveMint 15-04-2017 PTI

Mumbai: The ban on alcohol sale within 500 metres of highways will impact up to 30% of premium hotels, with Pune being the most affected city, domestic ratings agency Crisil has said.

In a report, its research wing said it studied 12 top cities to analyse the impact of the Supreme Court’s ruling, and found that nearly 30% of premium hotels will be affected.

“We have assessed 384 premium segment hotels across 12 cities, of which 102 hotels stand affected, which means nearly 27% premium hotels of the top 12 cities will be compelled to stop liquor sale,” the note said.

Hotels in Pune, Kolkata and Agra will be impacted the most, while those in the financial capital and Goa will be less affected. Hotels within the city will now pose major competition to premium segment hotels on the highway, it said. This competition will not be restricted only to the premium segment hotels but will trickle down to the 4- and 3-star category as well, it said.

With liquor sales contributing up to 30% of food and beverage revenues, Crisil said there will be a “hefty loss” in revenues, and added that there will be an indirect impact as well.

Revenues from other segments like the ‘meetings, incentives, conferences, exhibitions’ (MICE) events, weddings will also be affected, it said, adding that there can also be a fall in room bookings.

“All these factors together will have a major impact on revenue for the hotels on the highways and will also result in decline in profitability for the players,” it said.

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