On the back of increasing demand for leisure destinations, BSE-listed Chalet Hotels will add two leisure properties to its portfolio in the next two years. The company is backed by real estate development firm K Raheja Corp and its hotel portfolio includes the JW Marriott Mumbai Sahar, Four Points by Sheraton Navi Mumbai, The Westin Hyderabad Mindspace and Bengaluru Marriott Hotel Whitefield. Chalet is a hotel asset owning company.
Apart from its current portfolio of seven owned and operational hotels in Mumbai, Hyderabad, Bengaluru, and Pune, the company has identified National Capital Region, Chennai, and Goa as markets for leisure hotels to build or acquire new properties. The strategic intent of the firm is to diversify across geographies, asset classes and hospitality segments, the company’s MD and CEO Sanjay Sethi told Mint. At present, the company has over 2,500 rooms across its hotels. It also has another Westin hotel under development in Hyderabad.
The additional growth for Chalet is likely to come through a mix of greenfield developments as well as brownfield acquisitions, said Sethi. He said it was a good time to look at owning assets since several hotel companies have been hit hard by covid pandemic and may have balance sheet challenges. “We will evaluate all forms of growth. We don’t have a timeline for acquisition, we will look at opportunities as they come,” he said.
“Clearly, the impact (on hospitality) is lessening with every wave. There were a lot of vacations happening in resort destinations. While we see that easing off a bit now, we do see that resort and leisure destinations will continue to do well,” he added.
Based on its projected pipeline for the next few quarters, the company will rebrand its hotel in Powai Lake, Mumbai, from Renaissance to Westin. It is adding nearly 88 rooms to the existing hotel in Pune.
“We have a near ready 167 room Westin in Hyderabad to be commissioned in the coming financial year. Additionally, we are in the midst of evaluating the demand dynamics to commence construction of a 250-room hotel that will be a Hyatt Regency in Navi Mumbai ,” he added.
From an occupancy standpoint, Sethi said January was a bit of a setback due to the Omicron wave. However, the decline wasn’t as steep as in the earlier waves. In the first wave, the company’s occupancy had come down to 17% being used as quarantine facilities. This January, occupancy levels had hit closer to 37%, similar to the India wide average.
Apart from hotels, the company has 1.4 mn sq. ft. of commercial building space under development in land parcels around its existing hotels in Powai and Bengaluru. When this is developed, the portfolio will have more than 3,000 hotel keys and around 3 million sq.ft. of office space.
A new report by HVS Anarock, a consulting firm that specializes in providing services to the hospitality industry said as a result of the Omicron disruption, domestic air traffic declined by 43% in January 2022 as compared to December 2021. The hotel sector, the hospitality consultancy said, also reported lower performance, with occupancy falling to its lowest level since June 2021. On the other hand, room rates continued to improve on a year-on-year basis.
It said, the average daily rates in January 2022 were down between 15-17% to touch ₹4,900-5,100 marks. Average hotel occupancies, too, were down by 23-25 percentage points and were at 35-37% India-wide.
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