Royal Orchid Hotels, a Bengaluru-based hospitality company, has announced an ambitious plan to nearly double its room count to 11,000 keys across India within two years. Targeting new cities in Jammu & Kashmir, Uttar Pradesh, Andhra Pradesh, and Telangana, the company aims to secure management contracts and explore flexible-lease revenue-sharing models. Shifting to an asset-light approach, Royal Orchid focuses on leases and revenue-sharing agreements to accelerate expansion and mitigate financial risks. With over 100 hotels in India, Sri Lanka, and Nepal, the company seeks to strengthen its luxury and smart hotel segments, reflecting optimism in the rebounding Indian hospitality sector.
Royal Orchid Hotels, a Bengaluru-based hospitality company, has revealed an ambitious growth strategy. The company aims to nearly double its room count within two years, reaching a target of 11,000 keys across India. This aggressive expansion plan signifies their confidence in the rebounding Indian hospitality sector.
To achieve this ambitious target, Royal Orchid plans to enter new cities in key states like Jammu & Kashmir, Uttar Pradesh, Andhra Pradesh, and Telangana. They will also strengthen their existing presence in established markets. The company will primarily focus on securing management contracts for new properties. This strategy allows them to expand their brand reach without a significant upfront investment in acquiring properties. Additionally, they will explore flexible-lease revenue-sharing models for some projects, offering a win-win situation for both Royal Orchid and the property owners.
Royal Orchid is undergoing a significant shift in its business model. They are transitioning from hotel ownership to a more asset-light approach. This involves focusing on leases and revenue-sharing agreements for hotels instead of outright property ownership. This new strategy allows for faster expansion and reduces financial risks associated with owning and maintaining hotels.
The company plans to prioritize management contracts, franchises, and lease-based agreements for upcoming projects. They are particularly interested in establishing a stronger presence in the luxury and smart hotel segments, catering to a growing market segment of discerning travellers. This includes their recent acquisition of the operational rights for a 300-room five-star hotel located near Mumbai International Airport, marking their entry into the luxury category with a total investment of approximately INR 150 crore (estimated based on industry standards for similar sized hotels). They plan to replicate this strategy with a similar offering near the Statue of Unity in Gujarat.
Royal Orchid Hotels currently operates over 100 hotels across India, Sri Lanka, and Nepal. These hotels operate under the Royal Orchid and Regenta brands, offering a range of hospitality experiences. The company plans to rebrand their Regenta Inn line to better align with their focus on upscale hospitality experiences.
Royal Orchid's ambitious expansion plans reflect their optimism about the Indian hospitality sector's revival in 2024. Their strategic shift towards management contracts and a focus on new market segments like luxury and smart hotels position them for significant growth in the coming years. This expansion will provide travellers with a wider range of hotel options across India, catering to diverse budgets and preferences.
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