Royal Orchid & Regenta Hotels is one of India's fastest-growing hospitality hotel chains. It was founded by industry veteran Chander K Baljee who presently serves as its chairman and managing director. Royal Orchid & Regenta Hotels currently operates 70 hotels across 49 locations. Hemang Palan interviews Chander K Baljee to find out more about his hotel chain’s expansion plans in the post pandemic years
Hotel firms have been suffering since the Covid-19 pandemic began. Various restrictions due to the Corona virus have meant that occupancies took a sharp beating as the resurgence of the second wave of Covid has pushed back the revival process. How has the second wave affected your hospitality chain, especially in the last six months?
The pandemic set a confounding impact across the world, and still affects the global economy in several ways. As one of the worst-hit industries, hotels across the country witnessed a sharp decline in their overall growth. We weren’t spared either. The last 14 months have been challenging for us as we've dealt with an unprecedented demand slowdown and revenue challenges due to the strategies adopted to flatten the Covid curve such as community lockdowns, social distancing, stay-at-home orders, travel, and mobility restrictions.
However, we took this stoically. We picked ourselves up and dusted ourselves off and, decided we will do all that we can to overcome this uninvited challenge. While the first Covid wave caught us off guard, we were more than prepared for the second wave. We had taken substantial steps to preserve liquidity and mitigate the impact of extremely low levels of demand. In addition to reducing our operating expenses dramatically, we revised our organisation’s strategy to become more agile. We also started several initiatives such as the Management Development Program through which we succeeded at rationalising costs and improving customer experience. Our priority during the incessant lockdowns was also to implement safety SOPs at the hotels to minimise the impact of the Covid viruses. All of this and more ensured that we could fortunately sail through the second wave relatively unscathed.
Will city-based properties heavily dependent on corporate travellers continue to report low or average occupancy levels for the next few months? Do you think that resorts and properties primarily dependent on domestic tourists might witness good occupancy levels in the near future, especially during the festive seasons?
There is no denying the fact that corporate travel has largely been the bread and butter for city-based hotels. Especially for those properties which are concentrated in the CBD area of any city. While corporate travel has started for sectors such as pharma, banking, and manufacturing, hotels will only fully recover when other sectors start to travel as well. I foresee a large chunk of corporate travel picking up in Q1 2023 unless new variants of the virus play spoilsport.
During the first Covid wave, we pivoted our strategies to ensure all our hotels do well. For our city-based properties, we went back to the drawing board and started with realigning our marketing and revenue management strategy across channels and markets. A few other strategies that we implemented were – partnering with our corporate clients to offer special staycation, daycation and F&B offers for their employees, focusing on ancillary revenue streams such as promoting work from hotel, offering co-working spaces in our hotel, and renting rooms for parties. This showed us that despite the challenges that come with city-based properties, there are other options that can be explored to churn and maximise revenues.
Do you foresee huge consolidations in the Indian hospitality sector in the post pandemic years? What’s the expansion strategy of your hospitality chain? Are you eyeing acquisitions too?
Consolidation within the industry has already started to happen. Small and medium hotels which are highly leveraged have already started looking for an exit. The pandemic might have started this but the second wave coupled with degrowth in occupancy only made it worse for owners.
We aim to add 40 more hotels to our portfolio by the end of 2022, and we are well on our way to achieving this goal. We’re now investing in wildlife, spiritual, and leisure destinations while continuing expansion in Tier 1 and Tier 2 cities. Our expansion strategy is rooted in the fact that people today wish to travel further, more often, and to off-beat locations. Considering present-day guest needs, we’ve also started revamping our offerings through curated and personalised experiences for our more discerning guests.