‘Will deploy ₹800 crore to acquire new hotels by FY27’

By 2025, it will add 300 rooms to its existing portfolio, followed by another 500 by 2026, with a goal to double the total room inventory by 2027 to 2000. Currently, DS Group operates properties such as the Radisson Blu in Guwahati, Intercontinental Jaipur, and Renaissance Bengaluru as well as the Manu Maharani in Nainital. The company is expanding its footprint into emerging markets in the northeast and eastern India, including a renovation of its Radisson Blu hotel in Guwahati. "Our investments will focus on high-demand markets," he said.

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"Hotels have become a very strong business now. The challenge historically has been that many years ago, those who had money to deploy, were focused more on other types of real estate assets since they had a shorter gestation period before they gave returns. Today, the hospitality market is rewarding serious players well," he added. The company's overall portfolio level occupancy is about 70%, of which, properties like Kolkata are currently on a 90% plus level.

Last month the company relaunched its iconic 'Manu Maharani' hotel in Nainital under 'The Namah' brand which it also uses for its Jim Corbett National Park property. These hotels are part of the Radisson 'Individuals' or unique hotel collection brands.

'About ₹1,000 crore committed'

In July 2023, it acquired its first property in south India in a bidding process to take over Viceroy Bangalore Hotels Pvt. Ltd. This deal included the up and running Renaissance Bengaluru, a Marriott-managed property, set on 1.8 acres of prime land with 275 rooms. "We have committed ₹1,000 crore to our hospitality expansion, which will be funded through a mix of internal resources and strategic partnerships. Hospitality currently represents 2.5% of our total revenue, and we expect this share to grow as domestic tourism grows and international tourism rebounds," he said. "We have added rooms at our Guwahati, Jim Corbett and Kolkata hotels to increase their inventory," he added.

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The hotel business will be to look at similar acquisitions in the brownfield segment which are existing assets considering hotel acquisitions that offer long-term value potential. These could also be distressed assets that are going through corporate restructuring through banks and National Company Law Appellate Tribunal (NCLAT).

In addition to expanding its hotel network, the company is leveraging its food and beverage businesses to enhance guest experiences and is investing in technology to improve operational efficiency. "The gestation period in hospitality projects is very high and new projects can take anywhere between 4-5 years to come up. For us, we want to be able to purchase assets which start generating revenue from the beginning. Opportunities we'll consider will largely be in the 4-5-star category only and not the mid-market segment," he added. At present, most of the company's business comes out of business hotels since the portfolio is skewed more towards these hotels.

Demand for hotel rooms outpaces supply

According to hospitality consultancy Hotelivate, India had reached about 1.8 lakh 'branded' hotel rooms in the last fiscal year. Of this, upscale and luxury properties accounted for 39% of operational inventory, while mid and upper midscale hotels made up 45%. Over the past five years, demand for hotel rooms has been outpacing supply.

According to its data, available room nights (the total number of hotel rooms multiplied by the days they are available in a given period) grew at a compounded annual growth rate (CAGR) of 6.6%, while occupied room nights saw a slightly higher CAGR of 7.2%. As a result, the revenue per available room (a metric used by hoteliers to measure the revenue) recorded a robust CAGR of 7.8% during the same period, indicating strong market performance.

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It added that India’s hotel industry added 15,231 rooms in FY23, with strong growth across metros and emerging markets. Mumbai overtook New Delhi as the second-largest market, adding 1,665 rooms, while Delhi grew by 259 rooms to 15,118. Navi Mumbai expanded by 34.4% (420 rooms), and Dehradun by 67.5% (498 rooms). Jaipur added 1,132 rooms (18.1%). Smaller cities added 7,130 rooms (14.3% growth), reflecting rising demand and investor confidence.