PACRA Maintain Entity Ratings of Tourism Promotion Services (Pakistan) Limited

Tourism Promotion Services Pakistan Limited (“TPSP” or the “Company”) manages and operates a diversified portfolio of hospitality and heritage assets across Pakistan. Its core operations include eight Serena Hotels located in Islamabad, Faisalabad, Quetta, Hunza, Gilgit, Peshawar, Altit Fort Resort, and the newly developed Sost Serena Hotel. In addition to hotel operations, TPSP generates rental income from the Serena Business Complex in Islamabad and provides management services for heritage properties in Khaplu and Shigar owned by Agha Khan Cultural Services, Pakistan, diversifying its revenue streams. The assigned ratings reflect the Company’s strong sponsor profile, highlighting the operational and financial stability supporting its business. During CY25, the hotel portfolio underwent notable changes. Operations at Swat Serena Hotel ceased effective January 1, 2026, following non-renewal of the lease with the Government of Khyber Pakhtunkhwa. While the closure may have a modest impact on revenue, management expects the bottom line to remain largely stable, as Swat historically contributed a smaller portion of profitability. In parallel, the Sost Serena Hotel, a newly constructed 50-room property near the China border, achieved its COD in December 2025. Revenue generation is yet to materialize due to harsh winter conditions, minor exterior finishing works, and limited local tourism and trade infrastructure. Performance will depend on the development of cross-border trade and tourism, with management cautiously optimistic about its long-term potential. The Peshawar Serena Hotel was renovated during this period; this renovation enhances the experience and overall market offering. Islamabad Serena Hotel remains the largest contributor to revenue and profitability; however, the opening of new hotels in the capital may introduce competitive pressures in the near term. Financial performance for 9MCY25 reflects resilience amid sector-wide challenges. Revenue increased during the first nine months of 2025, with gross profit margins remaining largely stable. Net profit showed a modest improvement compared to the same period last year. Overall performance remained broadly in line with the prior year, though marginally below budget due to regional geopolitical developments, such as the Pakistan-India conflict, and adverse climatic conditions impacting demand and operations. The Company’s funding profile remains sound, with long-term loans obtained to support the construction of Hunza & Sost Serena Hotel and the renovation of Peshawar Serena Hotel, all of which are being serviced on schedule. Short-term borrowing facilities support operational needs and, together with returns from strategic investments, have resulted in net finance income. The Company does not intend to raise additional debt and continues to rely on existing financing lines.
The assigned ratings reflect the Company’s strong sponsor profile and its strategic portfolio expansion, which has enhanced both asset base and service capacity. While the closure of Swat Serena Hotel and the yet-to-materialize revenue from Sost Serena Hotel introduce some uncertainty, management expects these developments to have a limited impact on overall business performance. The high-revenue contribution of the Islamabad Serena property, combined with improvements across the portfolio and diversified revenue streams, underpins financial resilience and operational stability. Maintaining rating stability will depend on TPSP’s ability to sustain operational efficiency, manage seasonal demand fluctuations, optimize occupancy and profitability, and ensure timely servicing of debt obligations.

About the Entity
Tourism Promotion Services Pakistan Limited (“TPSP” or the “Company”), incorporated on March 19, 1969, is an unlisted public company and a subsidiary of the Aga Khan Fund for Economic Development (AKFED). The Company is governed by a seven-member Board of Directors, with Mr. Aziz Boolani, with over 35 years of experience in the industry, serving as the Chief Executive Officer. The Company's registered office is located in Islamabad.