Consolidation may be the norm in the hospitality industry, but talks between Sarovar Hotels & Resorts and the US-based Wyndhan Hotel Group has fallen through.

While valuation was one of the major concerns, the US chain is understood to have backed out since it wanted to own the domestic hotel management company, and not just the 30 per cent stake of its PE investors.

Anil Madhok, Co-Promoter & Managing Director, Sarovar Hotels & Resorts, said: “Wyndhan Hotel Group did not want to be a silent investor and was keen to take over the management of the company and not just the 30 per cent stake held by the existing PE investors. It did not want to own a minority stake since it would have had no management control but we were not ready for a 100 per cent buyout.’’ Wyndham Hotel Group already runs a franchise operation across 20-25 hotels in India for brands like Ramada, Howard Johnson and Wyndham.

Promoters of Sarovar were seeking a valuation of almost ₹500 crore.

“Unless there is majority stake, it would not be possible to have management control and no buyer would like to be in that situation today. While consolidation is happening among hospitality majors, in our case the deal is not going through,’’ he said.

Bessemer Venture Partners Trust and New Vernon Private Equity had picked at a 30 per cent stake nearly a decade ago in Sarovar Hotels & Resorts.

Sarovar Hotels & Resorts has promoted by Anil Madhok and Ajay Bakaya. It is a hotel management company and its revenues come from the management fee it charges across its properties. “Our revenues are determined by the management fees which currently stands at about ₹100 crore,’’ added Madhok.

With 75 properties, Sarovar Hotels & Resorts has now expanded beyond India into the African continent under its brands like Portico, Premier and Hometel. “We get management fees which are about 6-8 per cent of the sales made by each hotel,’’ he added

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