Hotel asset management companies make room for international brands

Indian hotel asset management firms, Samhi Hotels and Juniper Hotels, which have made global brands like Marriott International and Hyatt Hotels immensely popular in the country, are on a growth path.

 

These partnerships between Indian hotel asset management companies and global brands have brought in expertise and enhanced the local ecosystem of consultants, designers, architects, and project managers.

 

Samhi Hotels, which was listed in September 2023, has established itself as a key player in the market.

 

The Gurugram-based company recently announced a partnership with Marriott International to develop three new properties in India with a combined inventory of over 568 rooms.

 

“As of today, we have partnered with three hotel companies — Marriott International, IHG (InterContinental Hotels Group) and Hyatt Hotels,” Ashish Jakhanwala, chairman, managing director and chief executive officer (CEO), Samhi Hotels, told Business Standard.

 

He added, “Across these three companies, the number of brands that we have partnered with is eight across different price points.”

 

Marriott-branded properties account for the largest share of Samhi's revenue. According to its annual report, Marriott contributed 64.78 per cent of the company's total income from assets in FY24. It currently operates 32 hotels with 4,943 keys.

 

This latest Marriott partnership will add a Tribute portfolio by Marriott and Westin in Whitefield, Bengaluru, and W in Hitec City, Hyderabad.

 

“It's a fairly material development because these three hotels allow our upscale portfolio to grow by over 50 per cent in key markets like Bengaluru and Hyderabad,” he added.

 

Juniper Hotels, a strategic partnership between Saraf Hotels and Hyatt Hotels, represents a long-standing collaboration between the Saraf family and the Pritzker family, promoters of Hyatt Hotels Corporation.

 

“Till 2005, all Hyatt hotels in South Asia were in collaboration / partnership with the Sarafs,” said Varun Saraf, CEO, Juniper Hotels.

 

He added, “This makes Juniper the only company in India wherein Hyatt holds a significant shareholding.”

 

The Saraf family got the Hyatt brand into India through its first hotel development in Delhi in 1982.

 

The luxury hotel development and ownership company owns and operates a portfolio of eight properties with 2,115 keys, accounting for nearly 20 per cent of Hyatt-branded keys in India.

 

The most recent addition through this partnership is the Grand Showroom in Mumbai, a premium MICE (meetings, incentives, conferences, and exhibitions) offering.

 

The Mumbai-headquartered company was listed in February this year. According to its Red Herring Prospectus (RHP), Grand Hyatt Mumbai Hotel and Residences contributed 52.24 per cent (Rs 175.598 crore) of the total revenue from the operation of the hotel.

 

Chalet Hotels, part of the K Raheja Corp Group, is another significant player in the asset management space. It operates high-end hotels under global brands such as Four Points by Sheraton in Navi Mumbai and JW Marriott in Mumbai.

 

Marriott International, Hyatt Hotels and Chalet Hotels did not respond to queries sent by Business Standard.

 

Pune’s Panchshil Realty’s hospitality arm, Ventive Hospitality, is also aiming for expansion.   

The company recently received Securities and Exchange Board of India (Sebi) approval for its proposed initial public offering (IPO) of Rs 2,000 crore.

 

According to its draft red herring draft red herring prospectus (DRHP), Marriott operates six of its 11 hospitality assets, contributing 31.34 per cent of its pro forma total income for FY24.

 

Deepak Jain, managing director, MayFair Consultants, told Business Standard that it is the perfect time for any hotel company to be listed right now.

 

“The hospitality market has seen a positive turn after Covid and there has been a good amount of influx in branded hotel supply. The improved lending sentiment among banks is also one of the major factors,” Jain added.

 

For companies like Samhi Hotels, its focus is on large cities with good density of office space like Bengaluru, Hyderabad, Pune, Delhi, and Chennai. Even though Mumbai fits these criteria, Jakhanwala said he is waiting for the right moment to enter the market. He believes that while there are opportunities in Tier-II and III cities, his company is focused on intensifying its presence in large cities.

 

“Tier II cities like Lucknow and Ahmedabad are progressing into mini-metros and we see that cities like Patna, Jaipur, and Bhubaneshwar will soon follow the same path,” Saraf said.

 

An analyst said that in the last two-three years, there have been a lot of other hotel companies that are desperate to enter the Indian market with a branding sign.

 

This reflects the experts’ belief that the demand for international hotel brands in India will continue to grow and that the Indian hospitably market is underserved. Some major cities across the globe have as many rooms as the entire India.   

On expansion spree 

 

> Marriott contributed 64.7% of the SAMHI's total income from assets in FY24, followed by Hyatt at 17.3% and IHG at 16.2%

> Juniper Hotels owns and operates a portfolio of eight properties with 2,115 keys, accounting for nearly 20% of 

Hyatt-branded keys in India

> Chalet Hotels operates high-end hotels under global brands such as Four Points by Sheraton in Navi Mumbai and JW Marriott in Mumbai