Hospitality May, 23 2011

Spreading hospitality across India

By Namita Bhagat
Spreading hospitality across India

Beginning its journey in 2005, the brand ‘Cambay’ is all set to expand its foothold across India. In an interview Manoj Singhal, MD, Neesa Leisure Ltd, part of Neesa Group, shares further expansion plans of the company.

Namita Bhagat (NB): Tell us about the origin and growth of ‘Neesa Group’. How has been the jouney so far?

Manoj Singhal (MS): Neesa is a fast growing and well diversified group. Apart from hospitality we are into many other things like information technology, food processing, agri-tech and so on. As far as hospitality business is concerned, we have a company called Neesa Leisure Ltd. We own and operate all our properties under the flagship brand of ‘Cambay’. About our origin I can say that we started our operations in 2005 with a small hotel property at Gandhi Nagar, Gujarat with 20 room hotel property and within a span of just six years, we have room inventory of close to 1,000 rooms. We are one of the fastest growing hospitality companies in India and have presence not only in Gujarat but many other places and have 10 hotels on pan India basis as on date today.

NB: What is the USP of the brand ‘Cambay’?

MS: Our USP lies in fast execution of the project. We are one of the fastest growing companies and within a span of six years, from 20 rooms, today we have 1,000 room inventory and we have not purchased any hotel as such. We have identified land and did our own construction. All hotels are constructed by us. So, fast execution is our strength. We provide full service facility to our guest. Couple of our properties has golf course, club house etc., and value for money is what we give to our client.

NB: How many locations do you have at present for brand ‘Cambay’? Could you share with us the expansion plans for the company in this business segment of yours?

MS: We are mainly operating in tier 2 and tier 3 cities. Currently, we have operations and hotel properties in Gandhi Nagar and a couple of properties in Ahmadabad in Gujarat. We have two five star hotels in Jaipur, one property in Udaipur and recently we have opened one property in Neemrana. There is one property in Goa, one in Kerala. Also, one property in management contract in Bangalore.

As far as expansion is concerned we are planning to come up with few more properties. We have short listed new areas like Lucknow, Raipur and Nasik. These are the properties which are the subject of our IPO also and we also want to expand through the mode of management contract and looking for properties for management contract now to increase our presence.

NB: Would you consider franchising to enhance your brand’s presence in some point of time?

MS: Yes surely, we are now expanding in other areas only like management contract and franchisees. Management contract and franchising model, these two things are similar with a small difference. In management contract, the whole operation management lies with us and in franchising we extend our brand name and the operation remains with the owner of the property. We are very much entering into these things and we are short listing and looking for properties in franchise section.

NB: What are the factors which motivated you to opt for franchise route?

MS: For last six years we have been identifying land and have been into construction and building our property. And like other international and domestic hotel chains we also want to leverage our brand because now our brand is known in the market and people understand the brand ‘Cambay’. Till now we have been adding one property after the other and now we want to expand in fast mode and management contract and the franchise model is the easiest way and effective way, we can leverage our brand and expand very fast.

NB: What locations are you aiming for granting franchise rights?

MS: We are open for pan India expansion. We have identified three locations (as told before) where we want to come up with our own properties and for rest of India we are open for franchise and management contracts.

After a few years we would consider going international but at present we want to make our foot hold in India.

NB: What would be the selection criterion for the franchisees who would like to associate with you?

MS: For franchisee or management contact model, what we see is especially the number of keys i.e. if the number of rooms in a hotel property is less than 40 then we do not go for that property. And also we have certain parameters for our brand ‘Cambay’. Like we have a property called ‘sapphire’ which is a three star property then we have a segment called ‘Grand’ which is a five star property. So we have some set parameters for that and our team goes and sees if that hotel is according to our parameter and then only we take that property for franchise model.

NB: How and why did you plan to take IPO route to raise capital for company’s further expansion?

MS: Our brand has already been established in the market and we want to increase our business, people know us better and we come to next level. The object of the IPO is to bring in more properties like in Raipur, Nasik, Lucknow. These are the very potential areas. We want to come up and we want to take the IPO route. We also have private equity in our company.

NB: Getting listed raises people’s expectations. How would you deal with the pressure to perform? Could you share with us the numbers in terms of amount of capital you are aiming to raise via IPO?

MS: Basically, we put pressure on ourselves. We keep pressure on ourselves every time so that we can perform. You can see from our years of experience and performance, we have been going at very fast pace so we would be able to cope up with pressure. The amount we expect to raise is close to Rs 250 crore. Money would be primarily used for expansion purposes.

Related: Honing hospitality

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