Apeejay Surrendra is the the 8th largest hotel chain with asset ownership in India. They operate hospitality assets under their own brand ‘The Park’. They pioneered the concept of luxury boutique hotels in India under the brand, ‘THE PARK’, extending it further through ‘THE PARK Collection’, and in upper midscale categories with brands ‘Zone by The Park’ and ‘Zone Connect by The Park’.
Company has a long-standing expertise of over five decades in the hospitality business of owning and operating hotels, with first hotel being launched under their brand ‘THE PARK’ at the iconic Park Street in Kolkata.
They have established presence in the retail food and beverage industry through the retail brand ‘Flurys’. Apeejay Surrendra Park Hotels operate 80 restaurants, night clubs and bars. They have created award-winning brands such as Zen, Someplace Else, Tantra, Roxy, iBar, The Leather Bar, Pasha and Aqua.
ABOUT THE INDUSTRY
Indian Hotel industry contributed USD 40 billion to GDP in 2022. By 2027, this number will reach USD 68 billion and USD 1 trillion by 2047. Rising income levels, flow of domestic and foreign tourists and development of Tier 2 & 3 cities have added to this growth.
Strengths And Risks
+ Established Hospitality Brands : Through the strength of their brands including The Park, Flurys, Zen, Someplace Else, Tantra, Roxy, iBar, The Leather Bar, Pasha, Aqua, Lotus, Fire, 601, The Bridge, Aura etc, company has been able to further expand and their hotel portfolio at a CAGR of 21.56%, during last three fiscals.
+ High Occupancy Rate : Apeejay Surrendra has a strong operating track record of high occupancy and competitive average room rates for their hotel properties during last three Fiscals. They have been able to achieve an average occupancy level of 92% in owned hotels for Fiscal '23.
for our owned hotels
+ Diversified Business: The food, beverage, and entertainment business adds a non-cyclical element to the seasonal and cyclical hospitality industry, thereby providing added stability and resilience to earnings and cash flows.
+ High Margin Iconic Brand Flury's: The asset-light business model adopted by Flury's provides a diversified, resilient, and scalable business model to leverage on. In fiscal 2022, Flury’s had the highest EBITDA margin of 24.75 % among peers.
+ Strategic Locations: Company operates 27 hotels across upscale to upper midscale category, with pan-India presence representing 2,111 rooms. They have grown our business geographically across megacities, tourist centres, business parks, and emerging locations.
- Property Development: Business is exposed to risks associated with the development of hotel properties and land banks. Any
delay in the construction of new hotel buildings or expansion of existing properties may have an
adverse effect on business.
- Revenue Concentration Risk: A large portion of revenue (approx 75%) is realised from top five owned hotels with THE PARK Kolkata contributing 21% to the total income. Any adverse development affecting these hotels or the regions may
adversely affect the business.
- Seasonality: Hospitality business is subject to seasonal and cyclical variations that could result in fluctuations in cashflows.
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