Apeejay Surrendra Park Hotels signs on 320 rooms under management contract

Aims to have 60% such rooms, 40% owned, in three years as it goes asset light

Apeejay Surrendra Park Hotels has signed on 320-rooms under management contract that will be launched in 2021 across its brands, The Park Collection, Zone by The Park and the newly launched Zone Connect.

Apeejay Surrendra Park Hotels (ASPH) has four brands: The Park Hotels, The Park Collection, Zone by The Park and Zone Connect. Zone Connect, a limited service brand under its Zone by The Park portfolio, has been launched with four hotels, under management contract, in Coimbatore, Goa, Port Blair and Tirupathi. “The hotels are slated to open in the first half of 2021,” said Vijay Dewan, managing director, (ASPH).

In addition, ASPH has signed up a hotel in Dimapur under the Zone by the Park brand and one in Qila Mubarak, Patiala with the department of tourism, government of Punjab under The Park Collection brand. 

“We are also in the process of finalizing a property in Leh. So together we have signed up a 320 rooms under management contract under Zone Connect, Zone by the Park and under The Park Collection,” Dewan summed up.

Like most other hotel companies, ASPH is going asset light. At present, the ratio between owned and managed properties is 60:40; in three years, the plan is to reverse it in favour of more managed properties. 

“As we move towards more managed properties, the ratio would get reversed over a period of three years. So 60 per cent would be managed and 40 per cent owned,” said Dewan. ASPH currently operates 1,937 keys and another 320 would get added in 2021.

But ASPH would still be building hotels. In fact, in a sign of better market conditions, the company plans to restart its project in Pune, which was suspended during the Covid period. “It’s a 200-room hotel which will take 18-24 months to be completed,” added Dewan.

The hospitality industry, which has been hugely impacted by Covid-19 restrictions, is now slowly limping back. “Occupancy improved over the last quarter; in October, it was 66 per cent, which climbed up to 70 per cent in November and then in December, it went up to 88 per cent. We have had a significant comeback on the occupancy front,” said Dewan.

Three hotels – Kolkata, New Delhi and Visakhapatnam – had, in fact, clocked in more than a 90 per cent occupancy. In managed portfolio, two properties in Goa, had a 95 per cent occupancy.

“In resort destinations, businesses are significantly coming back. The leisure business is looking promising,” explained Dewan. But even in the owned properties or city-centric properties, December has been a good month in terms of occupancy.

As far as business travel is concerned, it is picking up, albeit in a gradual manner. Currently, business is being compensated by leisure. 

Dewan expects ARRs (average room rates), that have seen a drop of 40 per cent to be under pressure. “It is improving month-on-month, but will not come back to pre-Covid levels before 2023,” he said.