ROE is off-course Return on Equity that measures returns generated on shareholders wealth and companies across sectors try hard to maximize it. But as far as Hotel Industry in India is concerned it seems ROE is certainly Return on Ego as the promoters of most of the hotel companies in India went on to expand on leverage and at any cost without considering the return economics in mind. This is primarily due to the fact that there is a certain aspiration and glamour around hotels, especially in the high-end luxury segment, and many developers get in the race to build grand properties rather than one that will give them the best financial return.
