Sarovar Hotels targets revenues of Rs 2,300 crore this year

New Delhi: Sarovar Hotels is aiming to clock revenues of Rs 2,300 crore in this calendar year, a 15% growth over last year, Ajay Bakaya, chairman of Sarovar Hotels told ET.

"So far we are marginally ahead of the target. February was a phenomenal month for us, and March was better than we anticipated," said Bakaya. "Our business is focused more on domestic travellers, so we are not as impacted as others because of the West Asia conflict," he added.

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Sarovar Hotels clocked revenues of Rs 2000 crore last year and has a portfolio of over 150 hotels across 87 destinations in India, spanning over 11,000 keys.

The chain signed 61 hotels last year and has over 20 upcoming openings, with a focus on tier two and tier three markets, pilgrimage destinations, and emerging leisure markets. It also opened hotels in markets such as Kampala and Kathmandu last year. Bakaya said the chain would like to focus on quality instead of rushing into the numbers game to launch more hotels.

"My suggestion to my development team is that they should not be in a rush to add hotels if they can't add value," he said.

"If we are choosy and if we choose the right locations, we can clock better numbers even with a lesser number of hotels. We need to choose the right locations, the right hotels and the right size of hotels," he added.

The chain has also forayed into branded residences through an over 490 keys project with ACE Group in Greater Noida, and a 190+ keys project called The Element in Ghaziabad with Nirala India Parivaar in association with Ishaan Group.

The projects would be run under asset light management contracts model. Bakaya said branded residences will be the growth story for the next few years and the chain could also look at the gateway cities of Punjab for the segment. "It can be a strong market going forward provided the brands choose the owners wisely," he added.

He said domestic destinations and the hill stations could benefit because of the conflict in the April to June quarter.

"Destinations in Himachal and Uttarakhand are doing well due to high international flight fares, though a prolonged war like situation could also bring a sense of austerity," he added.

He said the company has marginal debt and should be able to repay it in the next two or three years. "In 30 years, we have invested in three assets. The plan is to be asset light," he added.

He said the Middle East market could be a promising one for overseas expansion though it is very brand sensitive and a tough market to break. Sarovar is targeting 400 hotels (operational and under development) across over 110 destinations in the next five years.