Leisure Hotels to expand its hostel brand

The second Bedzzz hostel has come up in Varanasi, after the one in Rishikesh. Though the first property is owned and managed by the company, the Varanasi hostel is functioning under a management contract. “These properties have rooms as well as hostel-style individual beds, and are in the budget to mid-market space. It is easy to get a return on investment within a few years,” he added.

Leisure Hotels is looking to open more hostels in leisure, and religious hubs as well as in destination for backpacking , besides other markets.

“The beds model is the most profitable of all our verticals because it requires less capital to be deployed and the return on investment is much sooner than other hotels. It is a mid-scale offering, but has dynamic pricing and that makes it quite viable,” said Prasad.

The group’s portfolio also includes business hotels, boutique resorts, villas and luxury camps. The firm owns 65% of the group’s assets. It also plans to invest at least ₹100 crore to build nine more hotels across categories in Uttarakhand and Himachal, which are likely to be ready by 2024. Besides, two properties, such as the Pilibhit House in Haridwar, are managed by the IHCL-owned Taj Hotels. The company has also partnered with The Claridges and Club Mahindra (Mahindra Holidays & Resort India Ltd) to run its properties. It also owns a villa, The Bungalows Light House, in Goa.

“We don’t have a mnemonic that we want to carry for our hotel management arm. So we are happy to take properties from owners that want to keep their own names and brand equity,” he said.

In the luxury space, its rooms are available for ₹15,000-25,000 per night. “In spite of the covid waves, and after being shut for almost six months, first, in 2020 and two months in 2021, on an aggregate portfolio level, we were able to recover our 2019 numbers and we have now beaten those figures,” Prasad said.

The company launched its first hotel in 1989. It owns experiential luxury resorts in North India, mostly in Uttarakhand. “We began to build our resort chain largely on the back of the domestic traveller. We found unutilised potential in Uttarakhand, as markets such as Goa, Rajasthan and Kerala evolved on the global map. We realised markets such as Haryana and , Uttar Pradesh, were not very well known and started focusing on building hotels in these locations.”

According to Hotelivate an hospitality consultancy, about 59,000 new rooms are likely to come up across Indian in the next five years. Of these, 72% or about 35,000 rooms, will be under active development.