What Park Hotels' IPO on Feb 5 Says About Its Expansion Plans

09.02.2024 - 16:13 / skift.com / Peden Doma Bhutia

Apeejay Surendra Park Hotels, commonly known as Park Hotels, is set to have its IPO on February 5. The group currently operates 30 hotels in 20 cities across India, with 2,298 rooms. Through a strategic mix of ownership, management contracts and leased properties, the group aims to open 56 hotel by 2026.

The Brands:

The Park is the group’s luxury boutique brand. There are eight properties with a total of 1,201 keys in Kolkata, New Delhi, Chennai, Hyderabad, Bangalore, Navi Mumbai, Vishakhapatnam, and Indore.

The Park Collection comprises small luxury properties. The group currently operates 64 rooms in this category spread across three properties — The Park Calangute Goa, The Park Baga Goa and The Denmark Tavern.

Zone by The Park is positioned at the upper midscale level and is mainly located in Tier 2 and Tier 3 cities. The brand currently manages and operate 11 hotels with 624 rooms with presence in Coimbatore, Jaipur, Chennai, Bangalore, Jodhpur, Jammu, Phalodi, Pathankot, Gopalpur, Dimapur, and Kolkata.

Zone Connect by The Park is also an upper mid-scale brand, the group currently manages and operates 8 hotels with 409 rooms with presence in Goa, Delhi, Coimbatore, Mussoorie, Indore, Udaipur and Port Blair.

The recently-launched Stop by Zone is an economy motel brand and is currently in two locations in West Bengal — Nandakumar and Simulbari. The group said it has currently leased 8 additional properties in Kolkata for development of roadside motels.

During a virtual press conference held on Wednesday, Park Hotels shared key insights into its strengths and strategic positioning in the hospitality sector. Here’s what we found out:

Occupancy and Revenue Leadership: The group boasts of industry-leading occupancy rates, reaching a 92%, a position maintained during the first half of the current financial year, said Vijay Dewan, managing director at Apeejay Surendra Park Hotels. Even amidst the challenges posed by the two initial years of Covid, the hotel group sustained occupancy rates at 67% and 79%, outperforming industry standards.

Dewan said the company maintains a 30% premium over competitors, attributed in part to a high percentage of repeat customers, ranging from 25% to 30%.

Revenue and Financial Performance: Driven by robust occupancy and strong performance in food and beverage services, The Park recorded revenue of INR 5.2 billion ($63 million) last year, marking a 96% improvement over the previous year and an 18% growth compared to the pre-pandemic year. EBIDTA reached INR 1.7 billion ($20 million), a 13% improvement from pre-pandemic levels.

Demand-Supply Dynamics: With a staggering shortage of hotel rooms nationwide, India currently has 178,000 rooms in the branded category,