You are here: Home » Companies » News
Business Standard

Park Hotels group aims at 26% inventory growth, led by managed properties

Company currently has an inventory of 1,937 rooms across 22 hotels which it intends to take up to 3,473

Avishek Rakshit  |  Kolkata 

Luxury Hotels
File Photo

Apeejay Surrendra (ASPH) is looking at a 26-per cent CAGR (compounded annual growth rate) in its inventory in the coming three years which translates into an addition of 1,536 rooms to its portfolio. The growth will be primarily driven by managed properties.

ASPH currently has an inventory of 1,937 rooms across 22 hotels which the company has targeted to take up to 3,473 rooms.

“We will have a 26 per cent CAGR in our inventory in the next three years and will be focussing on managed properties,” said Vijay Dewan, managing director, ASPH.

While 53 per cent of the rooms in its portfolio are currently owned and the rest managed, Dewan said said going forward managed properties are likely to grow to account for 53 per cent of the inventory while the remaining 47 per cent will be owned.

The Group currently has three brands – THE Park, Park Collection and Zone by The Park.

Its signature, THE Park hotels, are present in Kolkata, New Delhi, Mumbai, Navi Mumbai, Chennai, Hyderabad, Visakhapatnam and Hyderabad while the sole Park Collection is in Goa. Zone branded properties are located in Kolkata, Bengaluru, Jammu, Jaipur, Jodhpur, Coimbatore and Raipur.

An owned property at Pune is likely to be commissioned next year and other expansions in Navi Mumbai and Visakhapatnam are underway. An investment of Rs 380 crore is being made on these assets.

Dewan said most of the new additions will be under the Zone brand.

According to credit ratings agency Icra, the asset-light model enables the company to increase its presence while limiting the capital outlay.

“The fixed fee and a share of profit received on these managed properties also help the company improve its business returns, although Icra notes that the returns remain moderate on an absolute basis at present,” a ratings note from Icra said.

The group's recently commissioned in Biswa Bangla in Kolkata is under a long-term lease. It has 117 rooms developed by the West Bengal Government and will be managed by ASPHL. Icra says the terms of the management contract are favourable, and the property is expected to generate revenues and profits from FY2020.

ASPH has also filed draft papers for its proposed initial public offering (IPO), consisting of a fresh issue of up to Rs 400 crore and an offer-for-sale (OFS) of up to Rs 600 crore. The proceeds wil be used to repay loans of about Rs 300 crore and for other operational purposes.

Besides hotels, ASPH also operates a retail food and beverage business under the brand Flurys. It operates 38 Flurys outlets in Kolkata, and one each in Navi Mumbai and New Delhi.

First Published: Tue, February 25 2020. 18:37 IST
RECOMMENDED FOR YOU