Travel demand in India has remained healthy even post the growth normalisation seen in many consumer segments post Covid. Industry pricing across segments remains elevated without hurting growth, materially, suggesting that Indian consumers are priortising travel over many other spending categories, also aided by macro trends. The demand and supply growth imbalance continues to support growth in ARRs for the Hotel Industry.
Hotels listed universe will expand with potential listing of 4 new companies, looking to capitalise on strong outlook for Hotel industry. Together, Schloss Bangalore, Ventive Hospitality and Brigade Hotels are looking to raise ~Rs80bn in IPOs, while ITC Hotels is listing via demerger. Schloss is an owner-operator (Leela brand), while Ventive/Brigade are hotel asset developers.
Schloss Bangalore (Leela)
Founded in 1986 by late Captain CP Krishnan Nair, Schloss Bangalore boasts a portfolio of luxury properties under the Leela brand. The company’s proposed IPO of Rs50bn is a combination of a fresh issue worth Rs30bn (to repay debt) and an OFS valued at Rs20bn by promoter Project Ballet Bangalore Holdings (DIFC) Pvt Ltd, an affiliate of Brookfield Asset Management. In 2019, this Canadian Alternative asset management company Brookfield bought the assets of Hotel Leelaventure Ltd comprising key hotel properties in Delhi, Bangalore, Udaipur and Chennai for Rs39.5bn. The deal excluded Leela Hotel in Mumbai.
Leela currently operates 12 luxury hotels across India and is planning to add eight more through 2028. At present, the company manages 3,382 keys across 12 operational hotels, including 5 owned properties, 6 managed through long-term agreements, and 1 franchise-operated hotel (The Leela Mumbai). Further, the Company plans to expand its Portfolio with 8 new hotels, aggregating ~833 keys or 24.63% of existing keys through 2028 that will be either developed, owned or managed by the Company.
Ventive Hospitality
Ventive Hospitality was established as the hospitality division of Pune-based Panchshil Realty, and was formerly known as ICC Realty (India) Private Ltd. It underwent a strategic shift in 2017 when BRE Asia, an affiliate of Blackstone (formerly Xander Investment Holding XVI Limited), acquired a 50% equity stake. This acquisition positioned BRE Asia as a co-majority stakeholder alongside Panchshil Realty. Ventive Hospitality’s IPO issue size of Rs20bn is entirely a fresh issue of equity shares.
Ventive is a hospitality asset owner with a primary focus on luxury (plus upper upscale and upscale segments) offerings across business and leisure segments. All of the hospitality assets are operated by or franchised from global operators, including Marriott, Hilton, Minor and Atmosphere. The portfolio comprises 11 operational hospitality assets in India (in Pune and Bangalore) and Maldives, totalling 2,036 keys across the luxury, upper upscale and upscale segments as of FY24 end (vs 83 keys in 2007 when it commenced operations). Ventive’s platform includes 4 stabilized Grade A annuity assets (all in Pune) which are part of its hospitality-led integrated developments in Pune, having a total Leasable Area of 3.40 msf and Committed Occupancy of 97.04% as at FY24 end. The annuity assets contributed to 24.44% of Company’s pro forma revenue for FY24.
Through the development and acquisition-led expansion, Company has scaled up the portfolio and forayed into new geographies such as Bengaluru, Varanasi and the Maldives. The operating portfolio consists of seven hospitality assets with 1,331 keys which were developed by them and four hospitality assets with 705 keys which were acquired by them. In the pipeline, Company plans to increase the number of keys across the hospitality assets by 367 keys, from 2,036 keys (FY24 end) to ~2,403 keys in FY28 through planned development and expansion initiatives in Varanasi, Uttar Pradesh and Bengaluru, Karnataka in India and Pottuvil, near Yala East National Park and Arugam Bay Beach in Sri Lanka.
Brigade Hotel Ventures
Brigade Hotel Ventures is a wholly-owned subsidiary of Brigade Enterprises, a listed Real estate player. Brigade Enterprises’ move into hospitality began with the Grand Mercure Bangalore, which started operations in 2009, and has since expanded across South India, covering key states like Karnataka, Tamil Nadu, and Kerala and into Gujarat’s GIFT City.
New Additions Across Spectrum of Listed Hotels
Brigade has portfolio of 9 properties totaling 1,604 rooms as of 1HFY25 end. Of these, four hotels are operated under Accor brands, three hotels are operated under InterContinental Hotels Group, two hotels are operated under Marriott brands – in the upper upscale, upscale, uppermidscale, and midscale segments. Out of the 9 operating hotels, 4 hotels are located in Bengaluru (Karnataka) and company derived 63% of revenues from the hotels located in Bengaluru in FY24, followed by 15% from hotels in Chennai. Company turned profitable only in FY24.
The Co plans to expand its footprint across Southern India, catering to a range of hospitality segments as below, with projects likely to commision by FY28/FY29. (1) Luxury beach resort on the East Coast Road (ECR) in Chennai, Tamil Nadu, planned under the Grand Hyatt brand. (2) In Bengaluru, the company is eyeing the upper midscale segment with two new hotels under the Fairfield by Marriott brand; these plans are still awaiting Marriott board approval and the signing of definitive agreements. (3) In Hyderabad, Company is building a luxury hotel under InterContinental hotel brand. The Co has already signed a definitive agreement with IHG for this project. (4) Brigade is also venturing into wellness tourism with plans for a resort in Vaikom, Kerala, spread across nearly 15 acres.
