Sarovar Hotels to look at expansion opportunities in the Middle East
After Africa, Indian hotel Management Company, Sarovar Hotels will explore opportunities for expansion into Middle East hotel market. In an informal chat, Ajay Bakaya, Executive Director, Sarovar Group said that they have begun initial discussions for expansion into the Middle East market. “Only discussions at the moment. We are keen on replicating the model of India and Africa. We are strong in Africa. Therefore, Middle East can act as a bridge,” he said.
When asked for his comments on recent reports of acquisitions surrounding Sarovar Hotels, Bakaya said that 30% of the shares are held by foreign investors and that has been up for sale for the last two years. Anybody buying those shares would not have any impact on the equity structure of the company. “Typically VC funds and Private Equity flip every five years. They are at liberty to flip, but are not in a hurry,” he said.
As far as future expansion is concerned, Bakaya said that Sarovar Hotels will open six properties this year to their existing portfolio of 70 hotels. The prominent openings expected are a 150-room luxury hotel at Nairobi International Airport in Kenya. “We are third largest player in Africa, and second in Kenya,” he added. New openings are also expected in Jaisalmer in Rajasthan, Chennai, etc.
Regarding the business environment, Bakaya said that there has been moderate upswing in occupancies and rates in winter 2015. “This year for the first time in six years we have seen an upswing in hotel business. Curve has definitely gone up,” he said. With investments on infrastructure expected to grow, the hotel industry expects the demand for hotels to grow in the coming years, he said.
Commenting on the aggregators and its impact on mainstream hotels, Bakaya said that they are serious players and cannot be wished away. “Everybody is going to get involved with them in some scale going forward,” he said.