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Business News/ Companies / News/  Airport lounge services firm Encalm enters hotel business
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Airport lounge services firm Encalm enters hotel business

The company aims to operate 21 lounges and 3 hotels by 2025 and may restructure and raise institutional capital for expansion

Encalm Hospitality, incorporated in October 2021, started operating airport lounges in January 2022Premium
Encalm Hospitality, incorporated in October 2021, started operating airport lounges in January 2022

New Delhi: Encalm Hospitality, which operates Encalm Lounge, Atithya Services, and airport spa facilities, has forayed into the hotel ownership and management space, according to the company.

Encalm’s debut venture is a 58-room hotel in Hyderabad airport. It will also start work on developing a 2.13-acre land parcel at Goa’s Manohar International (MOPA) Airport.

In July, Mint first reported that the MOPA Airport developer had signed agreements to build two hotels on a land earmarked in North Goa. IHCL-owned Ginger or Taj Property will be developing the second hotel, said people in the know.

Encalm Hospitality, incorporated in October 2021, started operating airport lounges in January 2022, besides offering meet and greet services at airports. The firm seeks to operate 21 lounges and 3 hotels by 2025.

To expand its presence, the company may restructure and raise institutional capital. Its expansion plan is in line with Jyotiraditya Scindia’s 2022 announcement on how the civil aviation ministry was planning to increase the number of airports from 140 to 220 by 2025.

“We were allotted the land at Goa airport and it is likely to be a 220-plus room, 4-star-plus hotel. However, we have not finalized the operator yet. Initially, it will be a mixed model of ownership and management. But we are sure that we will be building hotels that are profitable from the beginning," Vikas Sharma, the company’s chief executive, said.

The firm operates three brands: Encalm Lounge in Delhi, Hyderabad, and Goa; spa and meet-and-greet services in Delhi (it was earlier run by Plaza Premium Lounge, the international firm that exited India); and the pay-and-use premium business-class traveller lounge at the international airport in Delhi. In April, it extended its operations to the Goa airport. It is now actively pursuing international expansion.

The cornerstone of its operations is its lounge at Delhi airport, which caters to a daily footfall of about 10,000 users. Additionally, Encalm’s Hyderabad venture, which was launched in January, is seeing about 5,000 travellers avail its services on a daily basis.

India’s air traffic has surged far exceeding the expectations of the industry to breach pre-covid levels. In July, air traffic rose 25% on domestic routes to 12.1 million against 970,000 passengers a year ago.

“Air traffic has grown exponentially and that has meant we have got a steady inflow of travellers to our lounges. They are now three times the size of what they were before we renovated the space and took over more, like at the terminal 2 in Delhi," said Sharma. The company manages about 70,000 sq. ft lounge space in Delhi, and 17,000 sq. ft in Hyderabad.

While Sharma did not disclose the company’s financials, it works on 15-20% margin. “The sheer demand in traffic in Delhi airport exceeded our expectations. We may expand our space and use technology to manage the number of visitors at credit card lounges." It has pacts with most credit card brands.

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ABOUT THE AUTHOR
Varuni Khosla
Varuni is an Assistant Editor at Mint. She writes engaging and informative stories on luxury brands, hospitality news, business of sports, business of advertising and marketing, gaming, tourism and travel, and the business of alcohol. She is skilled in communication, research, and analysis. Varuni is passionate about covering the latest trends and developments in the lifestyle and business sectors.
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Published: 20 Aug 2023, 10:36 PM IST
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