Acquisitions, new builds to fuel Chalet Hotels' expansion

The company is looking to capitalize on the hospitality sector's robust growth phase

- Varuni Khosla

Chalet Hotels Ltd is preparing to add another 1,000 rooms in India's big cities by FY28, including through acquisitions, as it seeks to expand its capacity by about a third in the country's heated hospitality sector.

The K Raheja Corp.-backed company, which owns big-ticket properties including JW Marriott Mumbai, Sahar and Westin Powai, will use internal accruals and target both new and existing projects in metro cities for the expansion, said managing director and chief executive Sanjay Sethi.

"About a year ago, we had clear visibility ahead of us for where the industry would be in four years, due to the hotel room demand and supply mismatch. One year later, we still see it as another four-year window," Sethi said in an interview with Mint. "The new hotel room supply is not changing quickly enough and the demand for hotel rooms seems very strong still."

India's hotel room inventory grew to about 180,000 rooms in 2023-24, a 9.2% year-on-year increase, according to hospitality consultancy Hotelivate.

This expansion was notable not only in major cities such as Mumbai, Bengaluru, and Delhi but also in growing hospitality markets like Dehradun, Jaipur and Navi Mumbai.

The domestic industry's occupancy rate in FY24 was 67.5%, one of the highest in recent history. It exceeded the sector's pre-pandemic occupancy rate of 66.1% in FY20, reflecting a robust recovery.