Priya Paul, Chairperson, Executive Director and Promoter, Apeejay Surrendra Park Hotels Limited

6 Feb 2024 , 01:08 PM

Run us through the key achievements of the company in its journey so far.

Our first hotel opened in Kolkata in 1967 and we have come a long way since then. We now have 30 hotels across 20 cities with 2,298 keys. We operate owned, leased and managed hotels across the segments of Luxury & Upscale, Upper Midscale and Economy. “The Park Hotels” belong to the first segment, “Zone by the Park Hotels” is in the upper midscale segment which generally speaking are 4 star hotels and “Stop by Zone” is our economy motel brand. In “The Park Hotels”, we have all three ownership formats, i.e. owned, leased as well as management contracts. “Zone by the Park Hotels” has about 20 hotels which are all asset light which means they are management contracts and leased properties.

We believe in leadership with differentiation. Our key strength is our ability to keep occupancy rates at higher levels, consistently. We have India’s leading occupancy of 93% (for the six months ending September 30, 2023). We are also market leaders in REVPAR in the luxury upscale segment. 

Our second key strength is that we are very strong in the food and beverages (F&B) business. Our F&B revenue helps us balance out the seasonality factor typically associated with the hospitality business. We operate about 81 restaurants, nightclubs and bars spread across our hotels. These are differentiated by design and by the experiences they provide. This segment contributed about 39% to our total revenue in FY23 and 42% for the six months ending September 30, 2023. 

Last, but definitely not the least is our solid financial profile. Our total income stood at ₹524 Crore in FY23, growing by about 96% over the previous year. We achieved an EBITDA margin of 33.77% in FY23 versus 21.76% in FY22. We achieved a Profit After Tax of ₹48 Crore with 9.1% margin. We are well poised to post sustainable growth and are committed to go green and embrace superior corporate governance practices. 

With the inauguration of the Ram Mandir temple in Ayodhya recently, religious tourism is back in the spotlight. How is the company tapping into the potential of religious tourism?

We already have a property in Jammu which is connected to the Vaishno Devi and it is doing quite well. We are looking at religious tourism very actively across the country.

How is the company looking to make the most of the three ownership formats – owned, leased and managed?

We have created an asset light strategy for expansion of the “Zone by The Park” and “Zone Connect by the Park” brands. We have a diversified pan India portfolio of owned, managed and leased properties. We plan to add about 4,153 rooms over the next 5 years. Out of these, about 2,371 rooms are being added in the asset light space of management contracts, 1,481 rooms are getting added on the owned side and 301 rooms are getting added on the leased side. There is a significant focus on the asset light side of the business model.

Some of the IPO proceeds will be used for repayment of debt. What is the debt currently and what will it be post this repayment?

We will repay about ₹550 Crore of debt. Post this repayment, we will be a debt-free company with a very healthy cash flow generation.

Run us through the growth strategies of the company.

Our key strategies include:

• Continued focus on the development of existing land banks and strategic allocation of capital
• Efficient capital allocation with an optimal portfolio of owned, leased and managed hotels
• Improving operational efficiency to achieve superior performance
• Develop and strengthen the Flurys ’ brand in the retail F&B business segment through expansion plans

Give us an overview of the Environmental, Social and Governance (ESG) strategy of the company.

There are defined goals in terms of ESG. The first one being that we want to be waste management neutral by 2025, we want to achieve energy neutrality by 2028 and then water neutrality by 2030. To this end, two of our hotels will be LEED certified by March 2024. We are embracing electric vehicles, solar energy across our operations. Our commitment to ESG runs deeper than mere a tick marking activity.