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Keys Hotels, the flagship hotel brand of Berggruen Hotels, is looking to expand through the franchise route. Currently, the company is close to signing two deals through franchise, the company officials said. “We are targeting 8-10 franchise deals by the end of the next financial year to reach up to 50 in this vertical, by the next five years,” said Sanjay Sethi, Managing Director and CEO, Berggruen Hotels.
The company has received proposals from various hotels for franchise agreement. “The franchise model is low revenue and high yield, hence a win-win situation for us as well as the associating hotels. In the franchise model, the owner of the hotel will continue to manage his hotel and also be benefited by the Keys’ brand name and its various marketing, partnerships and sales initiatives to provide them exposure to national and international consumers and improve their revenues,” Sethi said.
By franchise associations, the brand will be able to extend these high-end resources to the large part of the unstructured hotel industry, irrespective of their location, and help improve their top line revenues along with gaining deeper penetration of brand Keys in the country, he added.
Of the 19 Keys hotels that are in various stages of development, eight will be ready by this year. Two will be owned properties, while the remaining will be through management contract. The company’s two owned hotels will come up in Kochi and Vishakhapatnam, and are expected to be commissioned by June this year. The company will invest Rs 90 crore for the two projects.
It is also looking to expand its base in destinations such as Sri Lanka, Maldives, Nepal and Bhutan.
The company is targeting an overall turnover of Rs 170 crore for the next fiscal. “In general, the last year has not been great for the hospitality industry. While we expect the rates to continue to be under pressure, occupancy levels will improve from October. We are looking at a longish cycle of recovery for the hospitality industry lasting about seven years,” he added.
nivedita.ganguly@thehindu.co.in
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