Advent Hotels plans to expand in metro cities, focus on luxury segment

Mumbai-based Advent Hotels International is set to list on the BSE and NSE on November 13 and plans to expand in metro cities through upper upscale and luxury hotels

Hotel asset management firm Advent Hotels International -- which currently has partnerships with global hotel brands like Marriott International, Hilton Hotels, and Hyatt Hotels -- is planning to increase its presence in major micro markets in metro cities through upper upscale and luxury segments in India.

 

The Mumbai-based firm listed on the stock exchanges on November 13.

 

This follows Mumbai-based real estate developer, Valor Estate, demerging its hotel business in April. The demerger segregated the realty and hotel management businesses and is expected to unlock value of Advent from a larger growth potential in the hotel business.

 

“The capital structure required for a hotel-related business versus the capital structure that is required for the real estate business that Valor does is completely different,” said Shahid Balwa, vice chairman and managing director (MD), Valor Estate, adding that the company is focused on bringing large hotels to “difficult-to-get-into markets.”

 

This reflects in the company’s proposed pipeline, while it currently has two operational hotels, Hilton International in Mumbai and Grand Hyatt in Goa, with a total room capacity of 484 keys.

 

It is adding about 113 keys in the Grand Hyatt in Goa and has a pipeline of five hotels, according to its investor presentation.

 

It includes two hotels under construction, Marriott Marquis and St. Regis in New Delhi, consisting of 778 keys, which are expected to launch by January 2027. Additionally, the company has three more hotels under pipeline in Mumbai across Worli, Bandra Kurla Complex, and the airport.

 

Its existing operational hotels are completely owned by the company. The upcoming hotels in Delhi’s Aerocity is a joint venture with Prestige Estate and is expected to be India’s largest mixed-use hospitality development, with a capital expenditure of ₹ 5,400 crore, he added.

 

“We look at brownfield projects where we include a hotel, and that hotel complements the real estate part of the project,” said Balwa.

 

He also noted that the company is looking for possible partnerships with Accor Hotels. Meanwhile, Rahul Pandit, MD and chief executive officer (CEO), Advent Hotels International, and Balwa both emphasised that the company is open for growth through acquisitions and global expansion, given the right opportunity.

 

Pandit highlighted that the company has capital commitments of about ₹5,000 crore to grow this portfolio to 3,100 keys, and it can raise more funds or deploy its cash flow to leverage possible acquisitions.

 

“Currently, we are on track to deliver Ebitda (earnings before interest, taxes, depreciation, and amortisation) just shy of ₹200 crore, and by the time the full inventory comes online and stabilises by FY32, it will be over ₹1,200 crore,” Pandit added.

 

With demand in the hospitality industry growing at a compound annual growth rate (CAGR) of eight per cent, while supply is rising at a CAGR of five per cent, Pandit said that India’s hospitality sector has a long runway for growth.