Sarovar Hotels bets big on highway properties; 80 projects in pipeline

Enhanced connectivity is opening up opportunities for leisure and business travel, creating demand for accessible and convenient accommodation options, official said

Hospitality firm Sarovar Hotels is broadening focus towards highway hotels and resorts close to major cities, capitalising on the country's rapidly expanding roads network, a top official said.

The hotel chain has 80 projects in the pipeline over the next few years as part of its expansion plan, he said.

"Highway hotels and resort-concept properties close to cities, within three-four hour journey, are a new high-growth segment for hospitality, at a time when competition is getting intense in urban centres," Sarovar Hotels Chairman Ajay K Bakaya told PTI in an interview.

He said this strategic shift aligns with the ongoing road infrastructure development in the country.

 

Enhanced connectivity is opening up opportunities for leisure and business travel, creating demand for accessible and convenient accommodation options, he said.

"We haven't seen such development of highways in the past. Around 10,000 km of national highways are being constructed annually, which is remarkable. It is connecting places, and creating opportunities for highway hotels and resorts closer to cities," Bakaya said.

Sarovar Hotels, a part of the French Louvre Hotels Group, operates a chain of 135 hotels across 85 locations with 9,000 keys, mostly under management contracts and corporate services, but only a handful (four-five) of those are specifically designed as highway and resort properties.

The Louvre Hotels Group is a subsidiary of Jin Jiang International Holdings Co Ltd, one of China's largest tourism and travel conglomerates.

"There are new 80 hotel projects lined up. We will be adding 15-20 hotels comfortably every year over the next few years. We expect to cross 150 hotels by 2025, with a total of 12,000 keys. However, a limited number of these upcoming properties will be under the highway hotels and resorts segment," Bakaya said.

Noting that the hospitality business is capital-intensive, the top company official advocated for infrastructure status for the sector.

Bakaya hoped the sector would get that tag in the upcoming budget, stating that it would facilitate access to longer-term credit lines 15 years or more compared to the current 10-year terms, unlocking massive investment in hospitality, including the emerging segments.

"The corporate business currently accounts for 70 per cent of our total revenue in India, although this may marginally decline to around 65 per cent as resorts and highway motels contribute more in the coming years," Bakaya said.

The company is actively working to increase the contribution from the resort and highway hotel segments.

"Sarovar Hotels is experiencing robust growth, with an overall CAGR of 15 per cent, which includes 9 per cent from existing properties and 6 per cent from new projects being added annually," Bakaya said, expressing confidence that the strong growth trajectory will continue, with demand outpacing supply in the near future.

Bakaya also called for more concerted efforts to attract international tourists to India.