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Royal Orchid Hotels is embarking on a major expansion drive as part of its ambitious growth strategy to diversify its portfolio and adapt to the rapidly evolving hospitality landscape. The brand is aiming to strengthen its foothold in India’s Tier 1 and Tier 2 cities, including Mumbai, Delhi, Bangalore, Chennai, and Hyderabad, while also targeting fast-growing urban centers such as Pune, Ahmedabad, and Lucknow. In addition to domestic expansion, the group is exploring opportunities in Southeast Asia, with a particular interest in Thailand. In an exclusive conversation with Sumit Jha and Asmita Mukherjee, C.K. Baljee, Managing Director of Royal Orchid Hotels, outlined the group’s plans for growth and investment.
Recently, Royal Orchid Hotels announced new brands. Could you share the vision behind these new brands and how they align with the evolving market needs?
Currently, most of our properties operate under the “Regenta” brand umbrella, such as Regenta Hotels and Resorts, and Regenta Inn. As we grow, it’s important to position our properties to cater to different market segments. Thus, we plan to introduce an upscale brand, details of which will be announced soon. The first hotel under this new brand, a 300-room property near the airport, is slated to launch by early next year. We are also exploring a “smart basics” brand designed for the younger demographic, emphasizing modernity and affordability. We expect to announce these new brands once the hotels are ready, which will align with our overall brand refreshment strategy.
With the launch of these new brands, Royal Orchid Hotels will have three distinct brands. How do they cater to different market segments?
The new brands are intended to complement the existing brands, with the
new upscale brand will target the five-star luxury market. The mid-market segment will continue to be catered to by the Regenta brand, which includes both Regenta Hotels and Regenta Inn properties. The new “smart basics” brand, which is still a work in progress, will focus on providing all essential services to a younger, tech-savvy demographic. We aim to capture a wide range of market segments by complementing the existing Regenta brand with these new offerings.
By expanding the brand portfolio, we can better position ourselves to capture different market segments and offer a more comprehensive range of hotel options to its customers.
Geographically, which areas are you focusing on with these new brands?
We are strategically targeting multiple regions and markets to further expand our presence. We have a strong presence in South, West, and North India, from Ladakh in the north to Kabini in the south. However, we have limited coverage in Central, Eastern, and North-Eastern India. Along with these regions, our expansion blueprint focuses on South Asia, and Southeast Asia, where we see significant opportunities for growth.
Our primary focus within India is on Tier 1 and Tier 2 cities, where we aim to establish a stronger foothold. Cities like Mumbai, Delhi, Bangalore, Chennai, and Hyderabad are top priorities. We see tremendous potential in catering to the expanding middle class and local travelers who are seeking high-quality accommodations and experiences. Additionally, we are keen on exploring fast-growing urban centers like Pune, Ahmedabad, and Lucknow, which are ripe with opportunities for new hotel ventures.
We are also looking to extend our reach into South Asia, targeting culturally rich destinations like Sri Lanka, Nepal, and Lakshadweep. These regions offer unique opportunities for us to introduce our premium and boutique hotel brands, appealing to both domestic tourists and international travelers. We believe these markets will allow us to diversify our portfolio and capture a broader audience.
Our expansion strategy further extends into Southeast Asia, with a particular focus on Thailand. This vibrant country is known for its exciting tourism potential and growth prospects. By establishing our presence in Thailand, we aim to attract tourists from around the world and solidify our brand in one of Asia’s most sought-after destinations.
How do you plan to integrate these new brands with your existing portfolio, and what challenges do you foresee?
We have recently launched the Regenta Rewards Program, which will be applicable across all our brands, similar to how loyalty programs work for global hotel chains. This will help integrate our new offerings with our existing portfolio and provide a seamless experience for our guests. As for challenges, we do not foresee any major obstacles; the loyalty program is user-friendly and will help guests easily understand the diversity of our offerings.
Can you elaborate on the operating models you employ for your hotels?
We operate on three models: management contracts, franchise agreements, and revenue-sharing (flexi lease) models. Most of our hotels are under management contracts. We selectively offer franchise agreements where we believe the owner can be a good custodian of our brand. For instance, we have worked with hotel owners who are hospitality management graduates and desire recognition and distribution, which we provide. The revenue-sharing model allows us to take a percentage of the top line while managing the profit and loss. This model helps us to scale, as it adds to both our top line and bottom line.
What is the most popular model among these?
The management contract remains our most popular model. However, we are looking to have around 10-15% of future hotels under the revenue-sharing model to enhance turnover and profitability. The franchise model is also gaining traction, but it is less significant in terms of scale compared to the management model.
Are there any plans for further property ownership, or is the focus solely on an asset-light strategy?
We are currently pursuing an asset-light strategy and are not looking at new Greenfield projects. Instead, we are investing in expanding and renovating our existing properties. For instance, we have recently bought out some partners at our Goa and Bangalore properties and are expanding them. Additionally, we are undertaking renovations at our flagship hotel in Bangalore.
Can you provide insights into the current pipeline of brownfield and greenfield projects for Royal Orchid Hotels? What kind of timelines are you working with for these developments?
At Royal Orchid Hotels, we are actively pursuing both brownfield and greenfield projects to expand our footprint and enhance our portfolio. Our strategy is focused on redeveloping existing properties and establishing new ones in key markets, with carefully planned timelines to ensure swift and efficient growth.
Our brownfield projects are centered on urban redevelopment initiatives and strategic acquisitions in major cities such as Mumbai, Delhi, Bangalore, and Pune. In these key urban areas, we are upgrading properties to meet our brand standards, modernising facilities, and adding trend-aligned amenities that appeal to today’s travellers. Typically, these projects have timelines of 12 to 24 months, with minimal downtime, depending on the property’s construction status.
We are also focusing on strategic acquisitions in high-demand locations, such as popular tourist spots and bustling business districts. Here, our aim is to seamlessly integrate these properties into our portfolio, upgrade them to our brand standards, and maximise occupancy and revenue. These acquisitions generally have a timeline of 12 to 18 months, depending on the property’s current status.
Our greenfield projects involve entering new markets in Southeast Asia, the Middle East, and India. In these emerging markets, we are building hotels that align with our luxury and lifestyle brands, aiming to create unique, high-quality experiences. These projects typically take 24 to 36 months, including land acquisition, planning, construction, and obtaining necessary approvals.
Additionally, we are crafting high-end resorts in leisure destinations such as Goa, Kerala, North India, and select international markets. These resorts are designed to blend luxury, nature, and culture, offering exclusive experiences for discerning travelers. The development timelines for these resorts are strategically aligned with peak travel seasons, usually ranging from 24 to 36 months.
Our current pipeline is a dynamic mix of both brownfield and greenfield projects at various stages of development. We anticipate completing our brownfield projects within 6 to 18 months, while our greenfield projects are estimated to reach completion in 2 to 4 years. We remain strategically flexible, adapting our timelines based on market conditions and challenges, ensuring that we optimize resource allocation and maintain our high standards throughout each project.
Could you share the investment details for your ongoing brownfield projects?
We are investing around INR 15 crores in expanding our Bangalore resort, adding 28 wooden cottages. Additionally, we are adding 50 rooms to our Goa property with an investment of around INR 25 crores. These expansions are expected to be completed within this financial year.
How do you incorporate sustainability and environmental consciousness into your projects?
Sustainability is a key focus for us. In our larger properties, we have installed solid waste composting units and sewage treatment plants. We are transitioning to LED lighting, have minimised the use of plastic bottles, and introduced dispensers for toiletries to reduce waste. These initiatives have significantly reduced our environmental footprint and improved cost efficiency.
What is the pipeline for new hotel openings?
We are looking to add 25-30 hotels within the next year, including both new projects and conversions. We’ve already added 25 hotels over the last year, and we expect a similar pace of growth moving forward. Additionally, we are in discussions for around five conversions in the coming year.
How do you view the competition in the hospitality segment with the increasing number of domestic and international players?
While competition is certainly intensifying, a strong market minimizes its impact. For instance, new hotels often generate additional traffic and interest in the area. India’s growth story is robust, with increased global attention on our tourism and business sectors. The government’s initiatives, like “Make in India,” have fostered a positive environment for growth. As long as the overall economy remains healthy, competition should not be a major concern.
How does Royal Orchid Hotels maintain quality and manage owner relations across your properties?
We understand the importance of aligning with the owner’s requirements. We actively work with them to create realistic budgets and set clear expectations. We consider ourselves custodians of these properties, ensuring that they are well-maintained and not neglected. Every month, we conduct a review of all properties to identify underperforming areas, which are then addressed with our sales and marketing teams. Regular audits—both online and on-site—help us spot and rectify any issues, whether they pertain to service, the physical state of the hotel, or food quality. The goal is to maintain high standards, which in turn sustains the property’s reputation and business.
What trends do you see emerging in the hospitality industry in India?
Several trends will continue to shape the industry. We’re seeing a rise in luxury properties in unconventional locations like hill stations. Instead of international travel, people are opting for high-end experiences within the country. These properties aren’t just about providing a room and food—they are full-fledged destinations with multiple amenities, from spas to specialized treatments like weight loss or diabetes management. Boutique properties offering personalized experiences, such as butler services, are also on the rise. The homestay market, which has grown significantly with platforms like Airbnb, is adding competition. However, hotels provide a distinct experience with diverse food and entertainment options that many guests still prefer. Additionally, technology is playing a significant role. We’re exploring AI, ML, and the Metaverse to enhance guest experiences.
Food and dining are vital parts of hospitality. How does your group approach the food and beverage segment?
Our origins trace back to the iconic Balji’s restaurant in Simla, which had a 70-year run. This legacy makes food an essential part of our hotels, even if it’s just one restaurant in a smaller property. The tastes of younger generations are shifting— they prefer pizzas, dim sum, and pastas over traditional Indian dishes like dal makhani or butter chicken. We adapt by offering fresh, trendy dishes and catering to diverse dietary needs with vegan and sugar-free options. For example, India has the world’s largest diabetic population, and we’re mindful of that by providing desserts that are both delicious and suitable for diabetics. It’s about offering variety and staying ahead of trends while meeting customer expectations.
What is the balance between room revenue and food and beverage sales in your hotels?
The food and beverage segment contributes significantly, typically around 30-35% of total sales. We’re not just a bed-and-breakfast brand; our hotels offer multiple dining options, events, and more, which add substantial value to the guest experience and drive revenue.
Staffing is a major concern in the industry. How does Royal Orchid Hotels manage the challenges of finding quality manpower?
We recognised this challenge early on and established the Institute of Hotel Management in Bangalore in 1994, which still operates today. It’s become a training hub not just for new recruits but also for current staff. Training is a combination of online modules and in-person sessions, making it efficient. We emphasise multi-skilling; for example, a housekeeping employee may be trained to handle front office duties. This approach helped us manage workforce shortages during the pandemic.
Moreover, we are developing our own management talent through a structured development program. This is crucial, especially as we plan to open 25-30 new properties. It’s important to promote from within because these individuals understand our culture and standards.
What are your plans for the future growth of Royal Orchid Hotels?
Our vision is to focus on both quality and quantity. We aim to bring in more high-end properties under our management and expand internationally, particularly in nearby regions like Nepal and Sri Lanka. We are cautious about entering markets like Bangladesh and Maldives, but are considering Southeast Asia, Dubai, and possibly Africa. Our growth strategy is thoughtful, prioritising markets where we can maintain our brand’s integrity and standards.
Recognizing the evolving needs of travelers, Royal Orchid Hotels plans to introduce an upscale brand targeting the luxury market and a “smart basics” brand designed for the younger demographic. These new brands, along with the existing Regenta brand, will offer a comprehensive range of hotel options to cater to different customer preferences.
Geographically, Royal Orchid Hotels is focusing on strategic regions within India and beyond. The company aims to strengthen its presence in Tier 1 and Tier 2 cities, while also exploring opportunities in South Asia and Southeast Asia. This expansion strategy is driven by the growing demand for quality accommodations and the increasing disposable income of the middle class.
To ensure a seamless guest experience and maintain strong owner relations, Royal Orchid Hotels employs various operating models and focuses on quality standards. The company’s commitment to sustainability and environmental consciousness further enhances its appeal to environmentally conscious travelers.
As the hospitality industry continues to evolve, Royal Orchid Hotels is well-positioned to capitalize on emerging trends and maintain its market leadership. With its strategic expansion plans and focus on customer satisfaction, the brand is poised for continued success in the years to come.
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