KAHINI CHAKRABORTY – Mumbai
Sun-n-Sand Hotels is looking at expanding in tier II cities in India like Raipur, Indore, Bhopal in Madhya Pradesh, and Kolhapur and Solapur in Maharashtra. With corporates being the major clientele as compared to leisure travellers, the company believes that since the smaller markets lack good four-star and five-star hotel options, it is the right time to invest in these cities. Speaking exclusively to Express Hospitality Gulshan Arora, senior vice president, Sun-n-Sand Hotels said, “The company will look at developing 80-100 rooms property and would take up one property a year. It is looking at developing hotels with an investment of less than `one crore per room.” He added “The investment even in smaller cities is almost the same as in the major markets, but one can afford to have lower average room rate and room price and that is one of the major decisions behind hospitality companies developing mid-scale hotels in smaller cities. We built our Nagpur property which is a 139 room hotel two and half years back with a total investment of Rs 90 crore and spent Rs 75 lakh per room. From the beginning we have witnessed operational profits as we were not in debt and invest our own resources for expansion.”
Discussing market conditions and growth in business Arora said, “Till May this year the hotel was doing good in terms of MICE segment but from June-July there has been a major drop in bookings. This scenario has been in general across most properties which have been seeing a 25-30 per cent drop due to unsuitable market conditions.” Presently, the company has properties in Mumbai, Shirdi, Pune and Nagpur.