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‘Devaluation of Rupee immediate growth driver for hotel industry’

Anil Madhok, Managing Director, Sarovar Hotels, talks about the current scenario in the hotel industry, as well as his group’s expansion plans

How do you perceive the current status of Indian hotel industry? Which segment do you think will witness maximum growth?

The Indian hospitality industry has emerged as one of the key industries driving the growth of the services sector in India. The country is witnessing an unprecedented growth in hotel constructions and will be adding almost 114,000 hotel guest rooms to its inventory over the next five years. The mid segment is expected to see the highest growth.

The hospitality industry is witnessing heightened competition. What will the outcome be in your opinion?

The recent past has seen extensive growth in capacity in terms of new hotels coming up. This indicates the trends of things to come. There will be a dip in occupancies and hotels rates but this will stabilise as usual. The expanded supply will drive growth as was seen in the aviation and communication industries.

What, according to you, are the growth drivers for the Indian hotel industry?

The economic growth of the country is the biggest driver for the Indian hotel industry. The immediate growth driver is the devaluation of the rupee. This will make India a cheaper destination. On the flip side, with foreign holidays becoming dearer, many Indian holiday makers will be looking for holiday places within the country.

How has Sarovar Hotels performed this year in terms of occupancy and ARRs?

There has been an increase in occupancies in many areas where Sarovar is present. However, ARR has remained constant in most places.

What is your expansion plan?

We have already opened Residency Sarovar Portico in Mumbai and R.K. Sarovar Portico in Srinagar this year. Moreover, Sarovar is expanding in other parts of India. In the next six months we expect to open five properties. We intend to penetrate Solapur (Maharashtra), Thekkady (Kerala), Bhiwadi, Jaisalmer and Kilpauk (Chennai).

You recently expanded your portfolio in Africa. Are you planning to expand in other regions such as Middle East and South East Asia as well?

We believe African land has maximum potential and frontiers for development. Also, it has an approach of maximum engagement, great manpower and is ahead of the western traditional approach. Currently, Sarovar has two operating hotels in Africa. One is New Africa Hotel in Dar Es Salaam, Tanzania and the other one is The Heron Portico in Nairobi, Kenya. The Premiere will be our third hotel in Africa and second in Nairobi. India is increasingly showing an interest in Africa as a market and we also believe that Africa has huge potential in the hospitality segment. Currently, there are no expansion plans anywhere else. Sarovar intends to concentrate on one area at a time for best results.

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