Raoof Dhanani, Managing Director, Sayaji Hotels, talks about the performance of his hotels during the pandemic as well as the group’s expansion plan
Sayaji Hotels has been on expansion spree. The Group signed pact for 7 properties in March 2021, management/franchise agreements for 8 hotels and acquired intellistay hotels in November 2021. Its digital campaign ‘Shubh Vivah by Sayaji’ generated over 150 leads for weddings worth over Rs 4.5 crore revenue opportunities. Excerpts from the interview:
What is your expectation from 2022 in terms ARRs and revPar?
The hotel industry thrives on tourism. Business travellers are gradually increasing in number due to the rapid growth of the IT sector and the emergence of several global companies. In an increasingly competitive sector, the art of managing rates and availability while keeping an eye on all the different key performance indicators plays a major role. As the market is tremendously taking a swing, we expect a 10% increase in ARR and 20% in RevPAR in 2022 as compared to the previous year.
What is your current operational profile in terms of number of hotels and rooms and what is the expansion plan for 2022?
Sayaji Hotels presently has 13 properties with three flagship brands ‘Sayaji Hotels’, ‘Effotel by Sayaji’, and ‘Enrise by Sayaji’ with an inventory of over 1400 rooms. We are targeting 15 new properties in different states and cities in 2022. Maharashtra will soon witness Effotel and Enrise followed by Gujarat and Rajasthan. Villas and sprawling luxury cottages would be the inevitable part of our expansion. We are presently focussing on an asset-light model for expansion.
Where do you see Sayaji Hotels in 2027?
The hospitality sector thrives on creating loyal guests for our hotel. Understanding the need and profile of guests are vital for the success of the hotel industry. Looking at the brilliant growth during these decades, we look out to be the world leaders in hospitality in the next 5 years.
The last 22 months have been very challenging due to covid. What is your take on this?
The challenges and difficulties teach us valuable lessons and introduce new techniques to make our guests feel comfortable. The last 22 months have been a challenge for every property but not everyone was able to survive the challenge. Our guests kept visiting us and that was where we felt confident. We survived because of the revenue we generated.
Most of your new properties are coming up in tier II cities. Which segment of tourism industry like leisure or business you are trying to tap?
Two-tier cities are being explored by the leisure travelers and business travelers. These cities are growing with an enormous speed and are fast developing cities. With leisure and business travelers, we see a huge scope of revenue generation.
How important F&B and MICE for you? What is the contribution of these two in your overall annual revenue?
F&B and MICE are strong source of revenue bucket. They together pump in 70% amount of business. F&B is becoming a major contributor to our hotel’s positioning. Our guests are not only looking for a place to stay, but a huge demand for and spending in restaurant has been growing, allowing our F&B to net extra revenue. F&B profit margins rose from 24.9% to 30.5% between 2010 and 2016.
Attendees of MICE events fill up rooms and F&B. MICE brings us additional leisure business and is a profitable source of business for us. About 54% of the revenue is generated through the MICE. We look forward to enhancing the corporate experience and get more MICE bookings.
What is your marketing and promotional strategy?
Over the years we have laid emphasis on social media and digital media to promote the marketing objectives. Our digital campaign ‘Shubh Vivah by Sayaji’ recently generated over 150 leads for weddings worth over Rs 4.5 crore revenue opportunities. Our website has witnessed increased traffic, with effective SEO strategies and fresh content that is added regularly.
How closely do you work with travel agents/operators?
Travel agents/operators are a key factor in the success of the tourism industry. The Travel agents work closely with and give us a good amount of room nights, and this generates a business of 60%.
