Mr. Debashis Ghosal, Managing Director and CEO, Daiwik Hotels has done graduation from SRCC, New Delhi. Mr. Ghosal went on to qualify as a Chartered Accountant in 1993. He was soon inducted as a partner of one of the oldest Chartered Accountancy firms in India, namely N.N. Das & Co., Kolkata and undertook numerous challenging assignments as a practitioner of a full time Chartered Accountant. He also received the Fellowship of the Institute of Chartered Accountants (FCA) in 1998. Before beginning the journey for Daiwik Hotels, Mr. Ghosal had pioneered the multiplex revolution in Eastern India and worked closely with the governments of West Bengal and Assam to introduce the multiplex friendly policies and started 89 cinemas.
Daiwik Hotels Pvt. Ltd. is India’s first specialty pilgrimage chain of full service 4-star hotels. The company has introduced the pioneering concept of hotels specifically dedicated to the various needs of a modern-day pilgrim. Catering to this emerging segment of pilgrimage hospitality, Daiwik Hotels provides world-class hospitality standards to discerning, yet conscious pilgrims maximizing their experience through a host of knowledge-based services and an array of recreational and leisureactivities. Daiwik Hotels aims to align the pilgrimage with a leisure holidayto provide a stress free experience to the pilgrim.
Replying to
Yash Ved of
IIFL, Debashis Ghosal says “Our near term target is to set up and start a minimum of five owned hotels in 30 months.”
What are your expansion plans for FY13?
Our near term target is to set up and start a minimum of five owned hotels in 30 months time, including the first one which has started operations in Rameswaram with 90 rooms.
Tirupati, Dwarka, Katra and Varanasi properties will be operational by 2015.
Are you focusing more on pilgrimage towns?
Our complete focus is on pilgrimage towns only, as our specialty is full services for pilgrims. Daiwik Hotels is India’s first specialty brand of full service four-star pilgrim hotels catering to the diverse necessities of a discerning pilgrim.
Are you looking to cover more regions?
Yes, we are definitely looking at covering more regions across the country. Other than the five upcoming hotels, our future plans include creating an additional land bank of a further 15 pilgrim destinations between 24-30 months. We are aiming to have an inventory of at least 2,000 rooms in five years in the pilgrim circuit.
What is potential do you see for pilgrimage tourism?
Pilgrimage travel forms the largest base for travel worldwide (WTO), and India is no exception. In India, pilgrimage tourism is the largest travel category after ‘travel for social purpose’ visits. According to a survey conducted by the Indian Tourism Department, in the CY 2010, it was found that 60% of domestic travel was for religious reasons. Andhra Pradesh, Uttar Pradesh and Tamil Nadu account for 21%, 20% and 15% of domestic visits, riding on the back of very strong pilgrimage travel. Tirupati had over 23 million visitors in CY 2010, Rameswaram 9.8 million, Vaishnodevi over 10 million visitors and Dwarka over 5 million visitors.
However, the hospitality industry is very under-prepared for this kind of travel. Also, standard quality hotels which are not only clean and hygienic but also reliable and safe are lacking in almost all the pilgrim destinations.
We chose to enter pilgrimage hospitality because of this huge demand-supply gap in the country for quality offerings which are standardized in the mid-market segment and introduced Daiwik Hotels.
What is your revenue mix?
Room revenues account for ~45% of the topline. With limited food options and other facilities in these locations, we expect the F&B revenue to be at 30-35% and Spa revenues and others at around 20-25%.
Do you expect increase in average room rates?
Yes, we expect an increase in average room rates in the coming years. We are starting the room rates at very modest levels and see a gradual upward trend going forward.
What are your fund raising plans?
We have funded the business with our own funds and bank funding thus far. We are open to private equity funding if the offer is attractive and the focus of the brand’s visions are not diluted.
What is your business strategy?
Our target segment is primarily domestic pilgrim travelers. Having pioneered this concept of pilgrim hotels in India, our aim is to be the leaders in this sector. With hotels across the pilgrimage destinations in India, we want to be a room aggregator in the pilgrim circuit.
Currently we plan to do Greenfield projects, Brownfield and acquisition of hotels will depend on synergy with the brand and pricing.
We have offers of JV, lease and management contracts from land and hotel asset owners which we will consider on an individual merit basis to see whether such proposals have any synergy with our brand and the type of product and experience we wish to provide.
Brief us about your financials?
With an initial investment of Rs 1.80bn, we are planning to start five owned pilgrim hotels, including the first one which is already operational in Rameswaram.
The others will come up in Tirupati, Dwarka, Katra and Varanasi. In Phase – II, we plan to invest Rs 6bn to open owned hotels in another 15 pilgrim destinations that will cover Ajmer, Amritsar, Kamakhya and other such popular locations.
What is your current debt and debt equity ratio?
Our present debt equity ratio is at 1:1.38.