As an independent stand alone property, deep in South Goa, Caravela Beach Resort stands out for its sheer profitability, year on year, making it the envy of the hospitality industry. Under the stewardship of its Chairman, Sunder Advani, a veteran hotelier who brought the first international franchise to India, the hotel has chosen the path of dedicated professional operations, aimed at both customer satisfaction as well as its stakeholders. Diversifying the product mix, catering to a diversified customer base, Caravela is a success story that is worthy of being repeated and emulated. Here, we bring a quick Q&A with its chairman, Sunder Advani:
How does your hotel declare record profits year on year as a standalone property?
CMD, Advani Hotels & Resorts (India)
At Advani Hotels and Resorts (India) Limited, our dedication to sustainable growth and operational excellence has consistently delivered strong profits year after year. Our flagship property, Caravela Beach Resort in South Goa, stands as one of the region’s largest hotels, offering 200 rooms and the capacity to host large weddings and events. Spanning 23 acres with a 280-meter beachfront, it provides an idyllic setting for beach weddings, corporate gatherings, and family vacations. Named after the Portuguese ship Caravela, the first to sail into Goa, our resort embodies the spirit of pioneering. So, we have plenty to offer within our four walls, so to say. There is a product mix that caters to every possible customer visiting Goa – as a couple, as a family for weddings, for meetings, for the beach, whatever.
Designed by renowned U.S. architects WATG—whose portfolio includes iconic destinations like Atlantis, Sun City, Bellagio, and Wynn Las Vegas—the resort showcases a blend of Goan-Portuguese architecture, with Belt Collins Singapore as the landscape designers. Over three decades ago, we invested in creating a nine-hole golf course and Goa’s largest swimming pool, adding to the resort’s appeal.
Caravela Beach Resort’s success is reflected in a revenue CAGR of 11% over the past five years, with expense growth maintained at a modest 7% CAGR, demonstrating our focus on both growth and cost efficiency.
This performance is driven by strategic initiatives across multiple revenue streams. In FY24, Caravela achieved an impressive room occupancy rate of 83.9%, significantly above the industry average of 70%. Additionally, Caravela hosted 45 weddings this year—our highest-ever—cementing our leadership in the wedding segment. The resurgence of MICE (Meetings, Incentives, Conferences, and Exhibitions) and leisure travel further strengthened our top line. Our Total Revenue Per Occupied Room (TRevPOR) per night increased to INR 18,798 in FY24, reflecting our focus on maximizing value. Profitability also surged, with the Average PAT per occupied room doubling in the past five years to INR 4,327. However, hotels of smaller size find it difficult to make adequate profits.
As a debt-free company with low-interest costs, we enjoy a higher PAT. Combined with our robust cash flow from operations, Advani Hotels continues to deliver sustainable financial success while enhancing guest experiences and shareholder value.
Think of 10 things that you do to ensure healthy profits as a sharing of your learning experience
We have cultivated a set of core practices that drive sustainable and healthy profits. Here are ten strategies that have proven effective for us –
- Maximizing Occupancy: Empty rooms mean lost revenue, so we focus on dynamic pricing, adjusting rates throughout the day to stay competitive.
- Value Pricing: With low construction costs, we profit even at competitive rates, ensuring guests receive exceptional value for money
- Dual-Location Focus: Splitting time between Mumbai HQ and Goa helps us stay close to key markets and maintain operational oversight.
- Independence Benefits: As an owner managed property where all 3 Working Directors are hotel professionals, we avoid paying expensive Management contract fees
- Strong Sales Network: Our sales offices span major cities, ensuring consistent client engagement.
- Strategic Partnerships: Previous ventures, like our flight kitchen at Goa Airport, were profitable additions to our portfolio.
- Innovative Seasonal Marketing: We introduced India’s first casino to boost off-season sales, adjusting focus as market conditions changed.
- Cost-Effective Operations: Investments in heat pumps, water bottling, and batch cooking reduce energy and resource costs.
- Dividend Strength: Debt-free, we offer strong annual dividends due to our profitable resort model. These strategies reflect our commitment to sustainable growth and financial health.
- Direct Client Outreach: The few negative reviews received are read personally and corrective action taken immediately.
Each of these strategies reinforces our commitment to creating memorable experiences while ensuring strong financial performance.
