2024-12-19 05:30:01 :
The K Raheja Corp.-backed company, which owns high-priced hotels such as JW Marriott Mumbai, Hotel Sahar and Westin Powai, will tap internal accruals, managing director and CEO Sanjay said , targeting new and existing projects in metropolitan cities for expansion. Sisi.
“About a year ago, we clearly saw where the industry was going to be in four years because of the mismatch in demand and supply of hotel rooms. A year later, we are still looking at this as another four-year window,” Sethi told Mint said during the interview. “The supply of new hotel rooms is not changing fast enough and demand for hotel rooms appears to remain very strong.”
According to data from hotel consulting firm Hotelivate, India’s hotel room inventory will increase significantly to about 180,000 rooms in 2023-24, a year-on-year increase of 9.2%. This expansion is noticeable not only in major cities like Mumbai, Bengaluru and Delhi but also in growing hotel markets like Dehradun, Jaipur and Navi Mumbai.
The domestic industry occupancy rate for fiscal year 2024 was 67.5%, one of the highest levels in history in recent years. In fiscal 2020, the industry’s occupancy rate exceeded the pre-pandemic level of 66.1%, reflecting a strong recovery. Occupancy rate is a key hotel industry metric that measures demand and operational efficiency.
Chalet’s focus is primarily on building large hotels in large cities, primarily around office properties. The company currently has 3,052 rooms across 10 hotels, including The Westin in Hyderabad; Novotel Pune Nagar Road; and Duke’s Retreat in Lonavala. It is also preparing to open a hotel at Delhi’s Indira Gandhi International Airport.
Given that the hospitality industry is capital-intensive and cyclical in nature, “we decided to combat this by owning assets in spaces with office complexes (and) having office leases for at least 8-10 years,” Sethi said.
“We now have 2.4 million square feet of existing office space, (and) we expect our annualized return to be approximately $Rs 300 crore comes from these office assets that we own. These are incoming cash flows that help us fund new projects. “
Acquisition route
Chalet recently acquired an 11-acre land near Varca Beach in Goa. Other acquisitions include The Dukes Retreat in Khandala and The Courtyard by Marriott Aravali Resort in Delhi-NCR. It also has leasehold assets in Mumbai and Bengaluru.
“We are keen to grow, but greenfield development takes time. There are not many assets available for sale. So, we are also looking at brownfield projects… acquiring, renovating and increasing the inventory of some of the hotels we have purchased,” Sethi said.
“As a public company, we are still very young, but investors are finally seeing the durability of the hotel business cycle. We are built on a hard asset business, which helps us in terms of value creation,” he added , Chalet intends to invest approximately 20% of its portfolio in leisure hotels and the remainder in large inventory hotel cities in large cities.
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Sethi added that the company will only focus on building large hotels in large metros in the near future. “I’m not confident about going into smaller third- and fourth-tier locations to build leisure or business hotels. We will continue to focus on the leisure market that is 3-4 hours’ drive from the big cities, but not beyond that,” he said.
To this end, Chalet is evaluating options in Bengaluru, Mumbai, Delhi, Hyderabad and other cities.
Nikhil Shah, senior director, capital markets and investment services (hospitality), said: “Chalet Hotels’ strategic approach in the premium to luxury segment, focusing on large properties, enables them to target acquisition opportunities mainly in metros and tier-1 cities.” ) at Colliers India, a professional services and investment management firm.
Chalet Hotels’ competitors include Samhi Hotels Ltd and Juniper Hotels, which own their own hotels, and others such as Tata Group’s Indian Hotels Co. Ltd, EIH Hotels, Bharat Hotels and Lemon Tree Hotels, which own and manage hotel portfolios.
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Climb new heights
Chalet is one of the most valuable hotel companies in India with a market capitalization of approx. $As of December 18, the closing price of the day’s trading was Rs 21,700 crore $1,010.00 per share. The stock is up about 44% year to date and has climbed to an all-time high $Last week it was $1,052.45 per share.
Chalet’s operating income for the second quarter ended September 30 increased 19% compared with the same period last year $377 crores. However, the company reported a net loss $138.5 Crores from Rs. $Profit in the second quarter last year was Rs 364 million. However, the losses were due to the company’s reversal $2027 Crore deferred tax assets & $The deferred tax liability of Rs 55.36 crore reflects changes in capital gains rules.
Colliers India’s Shah said: “Since its listing about five years ago, the company has aggressively expanded its portfolio by adding several properties and capitalizing on growth opportunities, making it the only listed company to aggressively pursue such an expansion strategy. He added that Chalet’s “market capitalization could grow by 50% in the next 2-3 years” given its ambitious expansion plans.
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From a group level, Chalet’s occupancy rate is approximately 73%, which is higher than the industry average. During the company’s second-quarter earnings call on Oct. 25, Sethi said Chalet’s second-quarter operating profit, or earnings before interest, taxes, depreciation, and amortization (ebitda), grew 20% year over year.
“In the hospital leasing segment, our revenue grew 18% and EBITDA in that segment experienced similar growth,” he said on a conference call with analysts. “The company’s portfolio occupancy rate was 73.6%, growth “
RevPAR (revenue per available room) is another key metric for measuring hotel performance.
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