New Delhi, April 9 Sarovar Hotels is embarking on a long-term strategic expansion, aiming to have a total of 400 hotels in the next five years, with double-digit revenue growth, according to its CEO Jatin Khanna.
The company, which currently has a workforce of over 10,000 people in hotels, expects to add a similar number as part of its expansion program, Khanna told
The target is to have 400 hotels – operational and under development – across over 110 destinations in the next five years, he said when asked about the company's future expansion plans.
Elaborating further, Khanna said, "If you look at a 36-month horizon, we will have around 210 operational hotels, plus another 100-120 hotels under development... We are looking at almost 20 new openings this year, which by the time we finish this year will take us to roughly around 170."
At present, he said, "We are a company with 250 hotels operating and under development, with almost 22,000 keys, again, in operation and under development."
In terms of revenue growth, he said, "We are looking at double-digit growth. This year, we are already forecasting Rs 2,300 crore (over Rs 1,991 crore last year) despite whatever is happening around the world."
The company, which follows a calendar year, has already had a "good first quarter" and despite the West Asia conflict, he noted.
"For the first quarter, the same-store growth is 5 per cent, and the overall portfolio is almost 11.4 per cent, and for the full-year forecast, we are still talking about double-digit growth," Khanna said.
He further said, "Our long-term planning is still for double-digit growth... We are pretty optimistic, but also cautious right now as to see how the second quarter pans out. Our second quarter forecast is still looking positive."
About investments for the expansion, he said, as the company follows an asset-light model, the investments will be minimal.
"Out of our (current) total operating portfolio, 150 hotels, we own three hotels, and we use a management model with asset-light contracts and franchises... 90 per cent of our portfolio is management contracts, and 10 per cent is in franchises," Khanna noted.
He further said, "At this point of time, we're not looking at investing more into any of our own assets, and the asset-light model will continue to fuel our growth in the coming years."
About job creation through its expansion, he said, "We have a workforce of over 10,000 people in hotels, and obviously, corporate payroll is separate, plus we also operate almost 18 sales offices... when you look at the number of keys which are under development right now, we are again talking about almost 10,000 jobs being created in the coming years."
For the expansion, Sarovar Hotels is focusing on Tier-II/III cities, pilgrimage sites, and emerging leisure markets.
It has also expanded into branded residences with two properties – ACE HIVE, Greater Noida (over 490 keys) in partnership with the ACE Group and The Element, Ghaziabad (over 190 keys) – Nirala India Parivaar in association with Ishaan Group through management contracts.