Dominant market share in Indore
Flagship Indore property with 210 rooms has a 75% market share in the three-star segment with a room capacity equivalent to the combined capacity of the nearest four hotels
Its second property is in Baroda with 53 rooms
The company has the highest turnover of all non-metro and Goa hotels in the country coupled with the largest per-person banqueting capacity in the country of 1,400/365 days.
Average Room Revenues (ARRs) for the company were about Rs2,200 in FY07; expected to increase by about 27% in FY08
Food & Beverage (F&B) is an area of expertise; Room revenues to F&B ratio at 1:2 as compared to 1: 0.6 for the industry.
Company to commission a 247 room four star category property in Pune along with a club and banquet hall by December 2008
Funding requirements of Rs1.4bn already tied up through FCCB and preferential issue in 2006 and debt
Pune hotel expected to have operating margins of about 55% Scaling up ¡Barbeque Nation¢
The company, through its 100% owned subsidiary Sanchi Hotels, owns “destination restaurants” under the brand name of ¡Barbeque Nation¢ Investment by the parent company to remain at Rs250mn in the restaurant subsidiary Currently it operates five outlets: Mumbai, Bangalore (2), Hyderabad and Gurgaon; by end of FY08, it plans to take the total to 14
The company plans to open a restaurant every three months and targets 100 such restaurants by FY10 which would then provide it with economies of scale and even a likely hive off
Restaurants to drive growth
Although restaurants are lower margin business as compared to hotels, a lower gestation period (3 months) as compared to a hotel (2 years) imply that the company can build brand visibility faster All its restaurants would have identical setup and ambiance providing
a similar experience in all the locations
The company may look to the franchisee model once it achieves a certain critical mass with its restaurant’s Payback period for restaurants seen at about 2.5 years.
