Royal Orchid Hotels open to global tieups adding to shareholder value

Royal Orchid Hotels Limited plans to expand to 250 hotels and 20,000 keys by 2030, remaining open to global partnerships and selective private equity while pursuing an asset-light growth strategy

Royal Orchid Hotels Limited is open to partnering with global brands on the lines Marriott and Accor in India, as it expands its portfolio to 20,000 keys across 250 hotels by 2030, from 10,700 keys across 168 hotels at present. Arjun Baljee, president of the BSE listed company, tells Gulveen Aulakh in a video interaction that the company's decision to partner would be determined by the value it would bring to shareholders. Edited excerpts: 

 

Where do you see business going in FY26 and over a five-year horizon, now after the rebranding and restrategising? 

 

We will have 250 hotels by 2030 under our Vision 2030 plan. We’ll add roughly 120 Regenta Z hotels, the value smart economy segment. Above that is Regenta Place, cool neighborhood hotels with better services. Then about 30 Regenta Hotels & Resorts, the typical four-star offering. Crestoria is our experience-led four-and-a-half-star leisure brand, where we want about 27 hotels. ICONIQA plans to add eight; we’ve opened one already, so seven more by 2030. This is a stack, we feel, is manageable through conversions and new developments.

 

Which among them will be the growth drivers and value drivers? 

 

The fastest growth will come from franchise-managed Regenta Z hotels. At the other end is ICONIQA, which requires higher investment per asset. Regenta Hotels is in the middle, which will be the real revenue and growth driver. As Royal Orchid 2.0, we now have five distinct brands, each with its own business plan because ‘one size fits all’ doesn’t work. We sign hotels that add return on capital and brand value. We have around 47 hotels under development. Most are brownfield conversions, so we can implement brand specifications and build a homogeneous brand experience. 

Are you open to global partnerships?

 

We are a listed company, we have a brand and we also are building out a management company ourselves. Now, we will do what is required firstly for growth and secondly for the enhanced value to the shareholder. If it enhances value to the shareholder, we are open to anything. 

 

You sold your Tanzania subsidiary recently. Are you planning international expansion beyond Nepal and Sri Lanka where you’re already present? 

 

Tanzania faced economic and regulatory challenges, then Covid. We felt capital is better invested in India, where our growth lies. We chose asset-light expansion domestically, instead of building assets abroad. India itself offers a huge opportunity. We are in about 80 locations; this can grow to 500. Our business rests on three pillars: asset-light, return on capital, and execution capability.

 

Would you look at debt-heavy expansion or private equity?

 

ICONIQA involved some debt, but we will never bet the house on a single asset. Growth-at-all-costs models fail in downturns, as seen after the global financial crisis. We prefer asset-light growth, ensuring management bandwidth exists to properly support each hotel. Selective investments may happen, but there’s no plan to raise large capital for acquisitions.

 

We recently saw a shortage of branded keys in Delhi due to the AI Summit. In that context, should more greenfield projects be planned, as an industry? 

 

Brownfield projects have shorter time to market and better return on capital. Also, a one-week shortage doesn’t mean year-round shortage. Cities like Singapore and Dubai have conventions every month. Their convention centers run year-round. Delhi has major centers like Yashobhoomi, Bharat Mandapam, and India Expo Mart, but they’re not full year-round yet. Once they operate at full capacity and consistently attract 10,000-30,000 additional visitors weekly, hotels around those centers will remain full, and then new supply makes sense.