19 February 2019 Hospitality In the last years Capital Market Day Meet, IH had shared its Aspiration 2022 vision to achieve EBITDA margin expansion of 8% by improving revenue by 3-4% and reducing cost by 3-5%. According to a STR Horwath report, occupancy of domestic hotels stood at 65.3% (+0.2pp) with ARR growth of 1.8% to INR5,846 in 2018. In Dec18, IH rebranded and relaunched the Ginger Goa hotel, following which ARR increased by 30-40%. We note that Ginger hotels are operated by the companys subsidiary, which contributes 4%/2% of overall revenue/EBITDA (as of FY18). The flow through to EBITDA will be higher as incremental cost involved in operating rooms has not increased in proportion to ARR growth. The company aims to achieve EBITDA margin expansion of 8% by 2022, of which 3- 5% would come from cost measures.