Berggruen Hotels, a venture backed by New York-headquartered private equity fund Berggruen Holdings, that runs the ?Keys? brand hotels in India, said it plans to add 600-800 rooms next financial year in the mid-market hotel segment in the country. The company said it plans to open around eight new hotel properties next year, most of which will be owned. This will be the only time the company, which wants to be asset-light and focus more on management contracts, will add a significant number of owned properties to its portfolio.
Sanjay Sethi, managing director and chief executive officer, Berggruen Keys, said, ?Next year, we see our owned properties currently under construction getting operational. Following these openings, we do not plan to have large owned property portfolio and rather want to manage more.?
He added that the new properties are being added in the 3-4 star category of its brand ? Key Hotels.
Berggruen currently has hotel properties it owns in Trivandrum, Ludhiana and Bangalore. It will be adding owned properties in cities including Cochin, Vizag, Baroda and Pune. Other places in the expansion plan include Vishakhapatnam, Aurangabad, Goa, Lucknow, Jammu, Kovalam and Raipur. The new properties to be added next year will have typically 80-200 rooms capacity.
Currently, the company has six operational properties in the country. The company recently opened its Mahabaleshwar property with Evershine real estate developers.
During this year, Berggruen will also open properties at Bangalore (two) and Chennai.
Of late, the Indian hotel industry has seen enhanced focus on the mid-market brand from global hospitality players like Marriott, Accor and Starwood, among others.
According to reports on the industry, the maximum addition in room inventory is expected in the mid-market segment in the coming years.
According to a Crisil report, room supply is expected to grow at a compounded average gross rate (CAGR) of 10% during 2009-10 and 2011-12.
By 2016, Berggruen Hotels plans to have at least 15 managed properties and a similar number of owned properties.
This move is expected to help it more than double its revenues from an estimated Rs 55 crore this financial year to Rs 215 crore by then.