Chalet Hotels Targets 3X Growth In Next Four Years Led By Room Additions

Chalet Hotels expects to triple its Ebitda over the next four years, driven by the addition of new rooms and increasing revenues from existing ones, the hospitality firm’s Managing Director and Chief Executive Officer Sanjay Sethi has revealed.

Chalet Hotels saw a 23% year-on-year rise in its Ebitda at Rs 211.4 crore in Q3, as compared to Rs 172.2 crore in the same quarter last fiscal. Net profit grew 37% year-on-year to Rs 96.5 crore versus Rs 70.6 crore.

Talking to NDTV Profit, Sethi revealed that the company’s internal guideline is to triple its EBITDA over the next four years.

“It is a guideline, an internal guideline, so please do not take it as a guidance for any investors. But we are looking at roughly growing our Ebitda 2.5 to 3 times in the next four years,” he said.

The growth will be driven by new room additions, among other things, the top executive mentioned.

“We have got quite a bit going actually on a base of 3,050 rooms. We have got 1,100 rooms under development, which in itself is a third more supply coming into our portfolio,” Sethi said.

“In addition to that, the business development team is extremely active, and we would like to add at least another 1,000 rooms to the pipeline going forward,” he added.

In the next two quarters, the hospitality firm aims to have around 5,000 rooms in total, the Chalet Hotels MD said.

“So to give an overview between operational and pipeline, I expect it to be around 5,000 rooms in the next couple of quarters,” he shared. 

The company saw its RevPAR (revenue per available room) improve by 16% year-on-year to Rs 9,090 in Q3. Sethi said that the double-digit RevPAR growth is achievable in the next year.

“I'm very confident that double-digit RevPAR growth is pretty much on the cards for the next year,” he said.

Sethi expected Q4 to be better than Q3, going by the trend. In Q1, weddings and other events will aid the growth of the company.

“Talking about the next two quarters, Q4 is always better than Q3, and we believe that's going to be the trend going forward,” he said.

“Q1, we see this time, weddings coming into play, which was not the case last year. So we expect Q1 to have an upside on the back of weddings and events. We also believe corporate travel is going to continue to be robust moving forward,” the top executive added.

Shares of Chalet Hotels Ltd. closed 0.34% higher at Rs 767 on the NSE on Thursday, while the benchmark Nifty 50 moved 0.34% up to end at 23,249.50 points.