PACRA Assigns Initial Ratings to Hashwani Hotels Limited

Hashwani Hotels Limited (HHL or the Company) holds a prominent position within Pakistan's hospitality sector. The Company owns and manages Marriott Hotels franchises in Islamabad and Karachi, alongside the Zaver Pearl Continental Hotel in Gwadar. Assigned ratings take benefits of two key factors. First, it's an exclusive franchise agreement with Marriott International, which stands as a globally leading hotel chain, boasting a vast portfolio of nearly 9,500 properties across more than 30 brands in 144 countries, encompassing ~1.7 million rooms worldwide. Secondly, the Company benefits from the sponsor's extensive experience, cultivated over four decades, in the ownership, operation, and management of five-star hotel chains across metropolitan cities. During 2024, Pakistan’s tourism sector exhibited notable growth, both in revenue and international standing. The country’s ranking in the World Economic Forum’s Travel & Tourism Development Index (TTDI) improved significantly, moving up 20 places to the 101st position. The growing potential of Pakistan’s hospitality sector has attracted both domestic and international hotel chains, which are actively expanding their portfolios to meet the increasing demand for quality accommodations across luxury, business, and budget segments. This expansion reflects growing confidence in the market’s long-term viability and its capacity to absorb diverse offerings. Aligned with prevailing trends in the hospitality industry, the Company’s key performance indicators (KPIs), including occupancy levels and average daily room rates, demonstrated improvements. During 9MFY25, the Company’s topline improved to ~PKR 7.5bln (FY24: ~PKR 8.3bln), marking a ~20.2% YoY increase. Concurrently, the Company’s margins improved across all levels. Going forward, the Company's upcoming Zaver Pearl Continental Hotel project in Peshawar is expected to further strengthen revenue streams and margins. The Company benefits from highly skilled and professional management, providing robust operational support. However, independent oversight on the board for transparent decision-making would be viewed positively. The financial risk profile of the Company is considered strong, characterized by adequate coverage metrics, healthy cash flows, and an efficient working capital cycle. The Company’s capital structure is moderately leveraged, with borrowings exclusively comprising long-term facilities primarily utilized for CAPEX requirements.
The ratings are dependent upon the sustained operational performance amidst an evolving business environment, and a consistent improvement in profitability metrics. Looking ahead, the growth contributions from the Company’s non-operational projects to enhance the topline will remain critical. Furthermore, the consistency in the performance indicators, as illustrated in the shared financial projections, will continue to be paramount for the ratings.

About the Entity
Hashwani Hotels Limited (HHL) was incorporated in Pakistan on 12 October 1972 as a private limited company under the Companies Act, 1913 (now the Companies Act, 2017) and was converted into a public limited company on 11 November 1974. It owns and operates Marriott Hotels in Islamabad and Karachi, in addition to the Zaver Pearl Continental Hotel in Gwadar. The business is led by Hasan Ali Hashwani, who is carrying the legacy from Sadaruddin Hashwani, a prominent leading entrepreneur of Pakistan. Mr. Kamran Ahmed is the Chief Executive Officer of the Company.