Karachi: The VIS Credit Rating Company Limited (VIS) has reaffirmed the bank loan rating of Avari Hotels (Pvt.) Limited at ‘AA (blr)’, indicating high credit quality and a stable outlook. This rating reflects the company’s strong protection factors and only modest risk, which may fluctuate due to economic conditions.

According to VIS Credit Rating Company Limited, Avari Hotels has demonstrated robust financial management and strategic foresight in the hospitality sector. The company manages two five-star properties and several boutique hotels across Pakistan, maintaining a high standard of service and accommodation. The stable rating also takes into account the financial backing of Unilever Pakistan Limited, which services the loan through a lease agreement with Avari, providing a secure financial cushion.

This arrangement, along with increased room charges and normalized occupancy rates post-COVID, has bolstered Avari’s financial standing. However, the company faces challenges from inflationary pressures and high finance costs, which have slightly contracted margins. Looking ahead, the company expects stable occupancy rates driven by local sporting events and travel, alongside a major religious congregation that is anticipated to boost profitability in FY25.