Publication : India Business Journal
Date : August 2009
Page No. : 18
|The Pride Group of Hotels draws up a Rs 800-crore expansion plan to take the Pride brand to 30 cities.
The Pride Group of Hotels is abuzz with activities. The hotel chain, promoted by Mumbai-based SP Group of Companies with interests in construction, financial services, is on an expansion spree. The hospitality major has chalked out a Rs 800-crore ambitious plan to take the Pride brand to 30 cities in the next six years.
During the last five decades, only two world-class hotel groups have made their presence felt on a pan-In-dia level. By 2015, we will have 30 hotels with 3,000 luxurious rooms in 30 cities to emerge as the third-largest hotel chain in the country, I reveals Pride Hotels Managing Director S P Jain.
Pride Hotels is all set to launch a 100-room, luxury hotel in Goa this year entailing an investment of Rs 55 crore. It has also lined up Rs 250 crore to open a 250-room hotel in Mumbai by 2010, which will be followed up with another hotel in Alibaug. The company has already acquire land for its upcoming hotels in Mumbai, Alibaug and Delhi.
The hospitality company, which currently operates 10 hotels with 1,000 rooms in 10 major cities, recently opened a 120-room, five-star hotel in Banglore. The group currently operates five-star luxury hotels in Pune, Nagpur, Ahmedabad, Chennai and Banglore. Under the Pride Biznotel brand, it operates properties in Chinchwad(near Pune), Ranipet(near Chennai) and Puducherry, while it has presence in Mahabaleshwar and Jaipur under the Pride Resorts brands.
The Pride Hotels expansion comes at a time when the hospitality industry across the world is reeling under several problems. The global economic slowdown has pushed occupancy rates to the lowest in the last four decades. Besides, a spate of terrorist attacks across the globe, including major Indian cities, and the Swine flu threats have forced renowned hospitality chains to cut back investment plans and defer many projects.
The ambitious expansion plan has been worked out to the last detail. The company plans to raise rs 200 crore from an initial public offer (IPO) in the year 2010 to part-fund its growth. The balance will be raised through a mix of internal accruals, debt and private placement of equity.
We are looking at offloading around 30 per cent of equity to meet the fund requirements. We will also mobilise money from internal accruals and through term loans from banks and financial institutions. Kotak Real Estate Fund has invested Rs 45 crore and Primary Real Estate Investments, Mauritius, has invested Rs 10 crore in the equity capital of Pride Hotels, discloses Mr Jain.
The company is planning to submit the draft offer document to the Securities and Exchange Board of India(SEBI) in a couple of months. It has roped in Edelweiss as one of the lead managers for the proposed IPO.
Pride Hotels has come a long way in the past one decade. Mr Jain's grand vision and his untiring efforts have played a vital role in building the hospitality chain. A strong entrepreneurial spirit triggered a major transformation in Mr. Jain's life and career chartered accountant turned to hospitality.
As I am more inclined towards service-oriented enterprises, I turned towards the hospitality segment in the late nineties. I had realised by then that the industry has tremendous growth prospects in the future, reminisces Mr Jain.
A unique business strategy followed by Mr Jain has reaped rich dividends for the hotel chain. Mr Jain has mastered the art of acquiring start-up hotels at an attractive price and then converting them into state-of-the-art, luxury, five-star hotels. He zeroed in on hotel properties in prime locations in cities, which had fallen upon bad times because of inefficient management or lack of finance.
In 1999, a hotel in Pune was converted into a luxury, five-star property, giving birth to the first among chain of Pride Hotels. This was followed by a string of acquisitions in high-potential, tier-II cities, which firmly positioned the group in the crowded hospitality industry.
Like in Pune, the Nagpur property too was located at a prime location opposite to the Nagpur international airport. However, it was designed in an old-fashioned manner and was hence primarily used as a marriage hall. Mr Jain picked it up at a very low cast and undertook a costly, innovative, architectural exercise to reshape its exteriors and interiors. Today, pride Nagpur has become the best address in the region and dignitaries from across sectors make it a point to stay there.
The story of Pride Ahmedabad too is interesting. A promoter had started setting up a hotel property in Bodakdev, a fast-developing area in the city. The development ground to a halt following some financial problems with the promoter. Mr Jain stepped in acquired the property and refurnished and converted it into a grand, luxury five-star hotel. Today the 173-room property has emerged as the most preferred business hotel in Ahmedabad Incidentally, it is also the largest five-star hotel in the whole of Gujarat.
Mr Jain applied the same, successful strategy in Chennai too. He purchased a property in the Kilpauk area and renovated, refurnished and converted it into a modern and highly-sophisticated hotel. The 115-room hotel on the busy Poonamallee Road is already operating and one of the sought after hotels in the city.
Epitome of excellent
All the properties of the pride Group of Hotels reflect elegance and opulence with aplomb. Strategically located in prime areas, the Pride Hotels, with their elegant interiors, exquisite land scaping and smiling stewards and waiters, provides world-class hospitality services.
We do not strive only for five-star luxury in the exteriors and interiors of our properties, but also aim at giving services of international standards across the board, be it food and beverages, hi-tech connectivity, room facilities, soft furnishing or hardware, at all the Pride hotels. This also leads to standardisation of our services points out Pride Hotels CEO Satyen Jain.
Food and beverage at the company's chain of hotels are a class apart. With multi-cuisine restaurants and mouth-watering dishes, dining can be a memorable experience here. The ambiance at all its hotels is exquisite. Deluxe rooms and suites at the hotels ensure that its guest experience a home away from their own. The hotels offer air-conditioned, standard rooms, equipped with essential business aids and luxury of space.
The success of Pride hotels can be attributed to the positioning of the product. We have built smart business hotels. We know the requirements of our guests, who hail from the upper middle class business segment. Our facilities are tailored to meet his business needs, stresses Arun Nayar, Executive Director (operations), Pride Hotels.
The company has put in place an elaborate system to make sure that its guests enjoy business with pleasure. Its well-equipped banquet halls, varying in sizes, double up as ideal venues for business meetings, conferences, corporate events, seminars, get-together and weddings.
We provide facilities for meetings and conferences with more than 60 conference halls and board rooms that can accommodate people ranging from 20 to 2,000. It is one of the reasons why we have a repeat clientele and why our hotels have 75 to 80 per cent occupancy rates, notes Tridip Ghosh, general manager (Sales), Pride Hotels.
No wonder, the hospitality major has won several awards and recognitions. In 2008, it won the CNBC TV18 Emerging Company of the Year award and many other accolades.
Hoping to cash in on the growing business travellers, the Pride Group is focusing on its Pride Biznotel format. It is scaling up its Pride Biznotel properties in major cities and towns, with launches scheduled in Noida, Rajkot, Kochi, Gurgaon and Kolkata by 2011.
while five-star hotels in India are on a par with global competitors, there is a near absence of internationally acceptable three-star and four-star hotels. We aim to bridge this gap by expanding Pride Biznotel to multiple locations to meet the discerning needs of the budget traveler, emphasizes Satyen Jain.
Mr Jain has planned his venture with a long-term vision and reason. The hospitality major is set to spread its wings across the country in the next six years. Mr Jain had set a target of 10 hotels in the first decade of operations and it was achieved before schedule. Going by Mr. Jain and the Pride Group track record, one can safely expect to check into a Pride hotel in almost all the leading cities of the country very soon.