Delhi-based hotel management company Sarovar Hotels and Resorts is coming up with a three-star budget hotel under its ‘Hometel’ brand in Chennai with an investment of about Rs 65 crore, according to its managing director Anil Madhok.
“The 170-room property in Chennai will be company-owned, and will be operational by the beginning of the next financial year,” he told Business Standard. Of the 47 hotels that Sarovar currently operates, two are company-owned while the remaining are management contracts under the Sarovar Premiere five-star and Sarovar Portico four-star full-service brands.
The company already has two hotels in Puducherry, one each in Chennai and Kochi, three in Bangalore and two in Hyderabad under its fold. It is in the process of opening one more hotel in Hyderabad and three in Bangalore by the end of this financial year.
“The Hyderabad property will be a Sarovar Premiere brand with 230 rooms, complete with banqueting, restaurants, spa, swimming pool and a business centre. The investment in the project will not be done by Sarovar but by the company owning it. This apart, a Rs 100-crore hotel in Jaipur is on the cards,” Madhok said, adding the company will fund the proposed projects through a mix of debt and internal accruals.
Stating that the demand for budget hotels was much higher than luxury brands, Madhok said the budget room inventory in the country was now around 110,000, and another 20,000 rooms will come up in the next two to three years.
Sarovar currently manages 3,310 rooms across 47 properties, and expects this number to reach 6,310 by 2012, when it aims to have a total of 75 hotels, both company-owned and under management contracts. The company also manages two properties in Africa – one in Tanzania and the other in Nairobi.
“We currently manage revenues of Rs 500 crore, and see a 15 per cent growth in revenues this year,” Madhok said, adding the company was currently looking at Africa, which offers a huge potential for expansion, and will look at the West Asian market after a couple of years.
