The company will operate under three distinct brands—Larisa Hotels, AM Hotel Kollection and a newly-launched mid-market brand, 8Fold Hotel. The company is targeting to sign management contracts with independent hotels that may or may not already be branded. Some of these properties, in locations like Himachal Pradesh, Uttarakhand, Goa, Rajasthan, southern India and major pilgrim destinations, will include those still under construction, and those that are looking to change from one branded hotel to another.
Both Larisa Hotels and AM Hotel Kollection are homegrown hospitality companies specializing in boutique and leisure properties. In an exclusive conversation with Mint, Priya Thakur and Randhir Narayan, directors at Larisa Hotels and Resorts, said the company is focusing on properties that cannot necessarily afford to work with large international hotel chains.
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Last week, it signed a 90-room hotel in Tirupati and another upcoming property in Vrindavan, and has interest from at least four other religious destination hotels where private constructions are in full swing.
The merger has brought together six owned, two leased properties and 18 managed properties, creating a combined portfolio of 26 operational units with about 1,000 rooms and annual gross operating revenue of ₹100 crore. Of this, Larisa contributed a fourth of the gross revenue. The two entities, now streamlining their business, have created three brands including two leisure entities, under the Larisa and AM Hotel Kollection names, with smaller to mid-sized properties in resorts and leisure getaways.
For its mid-market brand 8Fold Hotels, it will be tier-II cities primarily where the business will be grown. The mid-market brand has been created to focus on rooms that charge ₹4,000-9,000 per night.
The company will focus on the outskirts of big cities, to build and manage new resorts as well, Thakur said. Larisa first began its business in 2015, with the intent to operate boutique hotels and resorts. Thakur set up her first hotel in Manali, Himachal Pradesh, in 2015 and one in North Goa in 2016. The company later ventured into Mussoorie in Uttarakhand and Shimla in Himachal Pradesh in 2019. “Some of the land at a few of our locations is owned by us and the remainder is on long lease. We have eight owned and operated hotels and resorts,” she said.
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The two businesses merged as the former is an asset owner and operator and Narayan has expertise in hotel servicing or helping hotel owners franchise their businesses with big, branded hotel companies, among other things it does. This way, the entities can balance out their owned and operated hotels portfolio. “We wanted to come together as the intent of growing the brand is to provide a platform for independent hotels to get more professional services to run their hotels, whether that means through management contracts or offering other hotel management services,” Thakur said.
Of the 1,000-room inventory, about 300 are leased or owned and the remaining are managed. The company is working on adding an additional six hotels with 120 rooms in the pipeline.
The company will also phase out two of its existing business lines, which includes villa management as well as working with new hotel owners who want to franchise with larger hotel brands. Over the next few years, it expects 20-25% growth from its existing operational hotels and the rest from new businesses. Since the merger, the company has secured contracts for six new properties and is exploring international expansion, focusing on short-haul destinations with direct flights from India.
New hotel companies
India’s hotel industry is undergoing a shift, as emerging hospitality ventures like Alivaa Hotels, Brij Hotels, Cygnett Hotels and others have adopted asset-light models, and are choosing to operate leases over management contracts, to fuel growth. Ananta Capital-backed Alivaa Hotels, for instance, has signed three properties and plans to reach 50 in five years, focusing on leasing rather than owning to ensure steady returns.
Brij Hotels aims to expand from 9 to 25 properties within two years, while Cygnett Hotels, with 25 properties, is working on 23 more in tier-II cities. These hotel management companies are giving flexibility and lower fees to more new hotel owners as compared to established hotel management brands like the Tata group’s Indian Hotels Co. Ltd, Oberoi Group’s EIH Ltd, and Marriott and Lemon Tree, while rising demand in both leisure and business travel is driving confidence in the sector’s growth trajectory.
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All of this augurs well for India’s branded hotel room inventory, which is expected to exceed 300,000 by 2029, driven by rising religious tourism, growing wealth and large-scale infrastructure projects, according to the India Hotel Market Review 2024 report by Horwath HTL. While concerns about consumer spending persist due to a weakening stock market, hotel operators are focusing on increasing occupancy rates in major business hubs. In 2024, the industry added 14,400 new rooms, with 67% of growth coming from areas outside the top 10 hotel markets, highlighting a shift toward leisure and religious destinations. The sector’s market capitalization has surged nearly 12 times since 2015 to ₹2.5 trillion.
