Pride Group of Hotels, which operates all its hotels under three brands — Pride Plaza (Luxury Hotel), Pride Hotel & Resort (upscale) and Pride Biznotel (mid-market), has decided to invest over Rs 600 crores over the next three to four years to strengthen its portfolio through greenfield projects and also planning to add six to seven hotels on Management basis in Hyderabad, Bhavnagar, Nasik, New Mumbai, Chandigarh, Mysore amongst other cities.
How would you explain the supply – demand scenario in the Indian hotel industry? Which segments – luxury, mid -market and budget, is driving the growth and why?
In the last few years, the demand is not increasing as much as supply has increased in hotel industry, particularly in luxury sector. In the present scenario of economy, mid-market hotels are doing good and growing more in comparison to luxury hotels.
Almost all hotel chains are on expansion spree. Do you think that there is enough scope for the expansion? What will be the impact on ARRs and occupancy?
Yes, there is an expansion plan with most hotel chains in India but I personally feel that there is not enough scope as there is over supply of rooms in cities like Pune, Ahmedabad, and Delhi. This has already affected ARR and occupancy as both are not increasing since last two to three years or even if it is increasing by a very nominal figure in current year.
In the above context, how do you see Indian hotel industry shaping up?
Indian hotel industries are now shaping up and moving into right directions but this sector is highly capital based that is why it will take some more time to establish.
How was the performance of the Pride Hotels in 2015 in terms of occupancy and ARRs and what is the expectations from 2016?
The Pride Group of Hotel has improved in occupancy and ARR in some of the units so our turnover is 10 per cent higher in 2015 in comparison of previous year. In 2016-2017, we are expecting to grow turnover by 50 per cent to 60 per cent above as our new hotel at Aerocity, Delhi has also started and market is also showing improvement in ARR as well as occupancy by 10 per cent to 12 per cent over the previous year.
What is the contribution of MICE and F&B in Pride’s overall business?
The Pride Group of Hotel has more than 40 per cent revenue from MICE and F&B. As Pride Hotels are mostly situated at excellent locations so it is a preferred destination for MICE and Pride is known to serve quality food and F&B outlets do well in all units.
What is the share of foreign V/s domestic market?
We have more domestic business comparatively to foreign but we do get around 25 per cent to 30 per cent business from our foreign guests in the group. The Government of India and most of the states has taken tourism on priority. Prime Minister Narendra Modi has taken keen interest in promotion of tourism hence the foreign arrivals are expected to grow in the near future.
What is the Pride Group’s current portfolio and what is the expansion plan? How many hotels and rooms are you looking to have under Pride by 2020? Can you share brand wise and city wise detail with us? What will be total investment? How are you going to arrange the fund for your expansion?
We have around 1,600 rooms operating pan India and expected to add another 500 rooms with four more hotels by 2020 and 400 rooms in major cities. We will be operating around 2,500 rooms all over in India. We have recently opened our hotel at Delhi, Aerocity with 385 rooms and five banquet halls. We have acquired land at Goa to add 225 to 250 rooms, Nagpur to add 75 rooms and planning to add 250 to 300 rooms in Mumbai. We will meet the total investment of Rs 600 crores by raising capital through the Initial Public Offer (IPO) of Rs.250 crores and balance Term Loan and internal accrual. Pride is planning to enter in market for IPO in 2017. Pride is also planning to add 6 –7 hotels on Management basis in Hyderabad, Bhavnagar, Nasik, New Mumbai, Chandigarh, Mysore etc.
You were looking at having your footprint in overseas market. What is the current status on this?
We are not planning to foray overseas market at this moment as we have number of projects in our hand and want to cover few more cities where we do not have our hotels.
Is there any plan for IPO? If so, please tell us more on this?
Yes, The company has a plan to do IPO in 2017 and planning to raise Rs.250 crores by way of equity to meet our expansion plan of the hotels at Goa, Nagpur (additional rooms) and in Mumbai.
What is your marketing strategy for 2016? Are you also promoting your brand in overseas markets?
Yes, Pride has 13 sales offices in India. The Pride Group of Hotel is an Indian company having major share in domestic market. Pride has created a place in India as Pride is a developing hotel which showcases Indian culture and promotes Indian cuisine. Pride is always marketing to domestic and international corporate companies for the business as well as leisure business. Pride is also having tie-up with “Great Hotels of the World” to promote marketing of our hotel worldwide.
Skilled manpower is emerging as a major challenge for hotel industry. How Pride is aiming to sort out this issue? What is Pride’s CSR policy?
Pride has number of training programmes for the youngsters as a part of job training for particular departments and for those students who have passed diploma in hotel management. Also we have management training programmes. Simultaneously, we have tie-up with few institutions in hospitality sector who are regularly sending students for training programmes and for employment.
Pride is doing CSR activity in the field of education. We have recently taken complete renovation of BKM High School in Chowpatty, Mumbai and spent Rs.25 lacs, the B.K.M. High School has more than 1200 students from the weaker section of the society.
