FabHotels plans to enter 15 more cities; add 1,000 hotels this fiscal

Budget hotels chain FabHotels plans to enter more than 15 additional cities and is looking to add 1,000 hotels under the franchise model in its inventory by end of this fiscal, a top company official has said.

The company currently has over 400 hotels under its inventory in around 40 cities.

"We continue to expand rapidly and are aiming to add 1,000 more properties across the emerging business cities in India by the end of FY19," FabHotels Founder & CEO Vaibhav Aggarwal told PTI.

The company plans to enter more than 15 additional cities this fiscal year. The locations include Kanpur, Ludhiana, Allahabad, Rajkot, Surat, Aurangabad, Ajmer, Ranchi, Raipur and Jamshedpur, among others, he added.

"We have a very high demand from hotels to partner with us, reinstating the faith in our business model and the shift which the industry is experiencing at present," Aggarwal said.

The company operates on the franchise model which is asset light, he added.

When asked how the company plans to fund its aggressive expansion plans, Aggarwal said: "In the last round we raised USD 25 million, and a majority of it is being spent towards expansion".

As the company follows an asset light model, so on-boarding new hotels is at a very minimal cost, he added.

"A majority of our spends are towards technology development, skilling and reskilling people in hospitality to ensure quality control and staff training," Aggarwal said.

On being asked about the main drivers of growth in the hospitality sector going forward, he said: "It is a sunrise moment for hospitality sector. The budget segment (which is 90 per cent of rooms in the hotel industry) is driving industry forward and will see multiple brands emerge".

More and more hotels will align with these new-age brands and improve consumer experience. Hotels which don't put consumer experience first won't survive, Aggarwal said.

Founded in 2014, FabHotels has raised USD 25 million in 2017 in a Series B investment round led by Goldman Sachs Investment Partners.