In a candid interview, Ranjit Batra, President, Hospitality, Panchshil Realty, shares his insights on tapping the myriad opportunities within the ever-evolving hospitality landscape
INTERVIEW BY SHAFQUAT ALI
Considering Panchshil Realty’s significant presence in Indian real estate and hospitality, including partnerships with Marriott International and recent expansions like their hotel in the Maldives, what do you see as the challenges and benefits of investing in new hospitality ventures?
Investing in new hospitality projects, such as building new hotels, can be both rewarding and challenging. Some of the key hurdles involved in such investments include high initial investment – building a new hotel requires a significant upfront investment in land, construction, permits, and other associated costs. This financial commitment can be substantial and risky.
With market volatility in play, the hospitality industry is sensitive to economic fluctuations, changing consumer preferences, and global events. Economic downturns or unexpected events like pandemics can significantly impact the success of new hotel projects. Another is regulatory challenges like obtaining permits, adhering to zoning regulations, and meeting various legal requirements can be time-consuming and complicated.
Navigating through these bureaucratic processes can delay project timelines. From a competition viewpoint, the market might be saturated with existing hotels or face future competition from other new hospitality projects. Managing the day-to-day operations, hiring and training staff, ensuring quality service, and maintaining standards can be demanding, especially in the initial stages. Developing brand awareness and cultivating a dedicated clientele necessitates targeted marketing strategies and financial commitment to advertising.
On the other hand, rewards are substantial with successful hotel projects yielding significant returns on investment. As the property gains popularity and reputation, it can attract more guests, leading to increased revenue and profitability. Hotels can be valuable long-term assets, appreciating in value over time.
Investing in hospitality projects not only diversifies investment portfolios but also serves as a strategic hedge against market fluctuations in other sectors. Beyond financial gains, such ventures stimulate local economies, foster employment opportunities, and contribute significantly to the growth of the hospitality industry within a region. However, navigating this terrain successfully demands meticulous market research, strategic planning, and a forward-looking vision to mitigate potential risks. Despite challenges, the rewards, both in terms of financial returns and the positive impact on brand recognition and local economies, can be substantial.
Atul Chordia, Chairman of Panchshil Realty, epitomizes dynamism, with an unwavering commitment to innovation and an acute attention to detail that sets Panchshil’s hospitality business apart. Renowned in Indian real estate circles, Chordia’s ownership of the Panchshil Group has reshaped the Pune skyline, introducing a diverse range of luxury hotels, business parks, residential complexes, and shopping malls.
His philosophy centers on design excellence, prioritising meticulous service design and sustainable construction practices to ensure projects endure the test of time. This dedication has earned Panchshil projects prestigious Gold and Platinum LEED certifications, underscoring their commitment to sustainability and quality.
Beyond construction prowess, Chordia understands the luxury mindset, crafting experiences that resonate with discerning clientele, setting Panchshil apart from competitors solely focused on design or construction. With a keen eye for detail, Panchshil projects excel in construction speed, on-time delivery, and superior quality, a testament to Chordia’s unwavering dedication to excellence. Furthermore, his passion for incorporating exquisite artworks and sculptures from around the globe adds a distinctive touch to his hospitality projects, elevating them to unparalleled heights of luxury and refinement.
When it comes to choosing the class of hotels, what are the factors influencing the decision between luxury, upscale, or other segments?
At Panchshil Realty, our key considerations in the investment decision include understanding market demand and location. More importantly, the target demographic is crucial. Assessing the needs of potential guests in a particular location helps determine the appropriate class of hotel. The geographical area and its economic status play a significant role.
High-income areas or popular tourist destinations may support luxury or upscale hotels, while business-centric areas might require mid-scale or business-oriented accommodations. Considering the long-term prospects and potential evolution of the market segment is important. The chosen class should align with future market expectations and trends.
Ultimately, the decision on the class of hotels depends on a thorough analysis of market demand, investment capacity, brand strategy, guest expectations, and long-term business objectives. Each segment offers its own set of opportunities and challenges, and choosing the right class involves aligning these factors with the overall business strategy.
Investment capacity and ROI expectations play a strong role in determining the feasibility of developing a luxury, upscale, or mid-scale property. Luxury hotels typically require higher initial investments. Balancing investment costs against the expected revenue and profitability is crucial. Luxury hotels may yield higher profits but often involve higher operational and maintenance expenses.
I do believe very strongly that a hotel’s brand strategy impacts the chosen class. Luxury and upscale segments emphasize high-end experiences, service offerings and amenities. Luxury hotels often offer extensive amenities like spas, fine dining, and concierge services, while mid-scale hotels focus on essential services and comfort.
Assessing the competition helps determine where there is a gap in the market. Choosing a segment where there is less competition can be advantageous.
From an operating cost point of view, luxury hotels typically have higher operating costs due to the maintenance of exacting standards, staff training, and luxury amenities. The level of service and staff training required varies across different hotel classes. Selecting luxury, upscale, or other hospitality segments hinges on understanding market demographics, location, competition, brand strategy, costs, industry trends, and ROI. Thorough analysis of these elements is crucial for informed hotel development and investment decisions.
With regard to brand partnerships, what are the benefits and considerations of collaborating with a single operating company or diversifying across multiple brands?
Again, both offer distinct benefits and considerations. Choosing between a single operating company or diversification across multiple brands depends on a company’s strategic goals, risk tolerance, market positioning, and operational capabilities. Some businesses prefer the stability and alignment offered by a single operating company, while others seek the benefits of diversification, innovation, and wider market reach by collaborating with multiple brands. A balanced approach that aligns with the overall business strategy often yields the best results.
Tell us about the company culture at Panchshil.
As the economy and industry is adapting to a host of recent changes, from a rapid work shifts to altered business dynamics, Panchshil Realty group critically emphasizes the breadth of potential changes to better prepare employees for the road ahead. The key is to balance short-term cost management with the need to build resilience to rebound when required. At Panchshil, we are focused on cultivating thriving cultures of internal mobility, prioritising continuous learning, and delivering robust benefits to support employees.
The workplace of the future is here; and we aim to approach each component of this new normal as an opportunity to maximise our company culture and differentiate ourselves as an employer of choice. A prioritisation of well-being in the workplace leads to more benefits and supports for our employees, such as in physical and mental health.
We strive to create sustainable social projects and make maximum impact in bettering lives. At Panchshil Realty, culture is our competitive advantage. We foster a culture of innovation, creativity, and out-of-the-box thinking, encouraging our team members to challenge the status quo, push boundaries, and pioneer new approaches on the field.
What are the key factors that you take into consideration when assessing the profitability and feasibility of renovating existing properties versus undertaking new builds?
Conducting a thorough cost-benefit analysis considering renovation costs, potential revenue during renovation periods, and long-term ROI is crucial. Typically, analysing market demand, competition, and potential returns in the chosen location helps gauge the feasibility of renovation versus new builds. At Panchshil Realty we ensure a thorough evaluation of long-term growth prospects, market trends, and the competitive landscape aids in making informed decisions about renovation or new builds.
Ultimately, the decision between renovating existing hotels and undertaking new builds depends on factors such as investment capacity, market analysis, strategic goals, and risk tolerance. Each option has its advantages and challenges, and the best choice often aligns with the overall business strategy and market conditions. Assessing the profitability and feasibility of renovating existing hotels versus undertaking new builds involves considering several factors such as lower initial investment.
Renovating an existing hotel typically requires a lower initial investment compared to building a new property from scratch. Renovations often have shorter timelines compared to constructing new buildings, allowing for quicker re-entry into the market. Renovations can leverage existing infrastructure, such as location advantages, established customer bases, and operational systems, saving time and resources. Upgrading an existing property can enhance brand value, attract new customers, and retain existing ones by offering improved amenities and modernised facilities.
On the other hand, building a new hotel allows for customisation and innovation in design, technology, and amenities, providing a competitive edge and meeting modern guest expectations. New builds can incorporate energy-efficient systems, optimised layouts, and state-of-the-art infrastructure, potentially reducing long-term operational costs. A new property offers an opportunity to position the brand distinctively, targeting specific markets or niches. New builds avoid operational disruptions faced during renovations as they start fresh without impacting ongoing business.
How are emerging trends like sustainable and experiential travel shaping investment strategies?
Emerging trends like sustainable and experiential travel significantly impact investment strategies in the hospitality industry. Integrating sustainable practices and offering experiential stays have become critical elements shaping investment strategies in the hospitality sector. Properties that align with these trends tend to attract environmentally conscious and experience-seeking travellers, positioning themselves for long-term success in a rapidly evolving market.
Sustainable travel investment strategies include green initiatives, certifications and standards and partnerships and collaborations. These investment strategies result in unique offerings whereby investors focus on creating unique experiences within hotel properties, emphasizing local culture, activities, and immersive guest experiences.
In addition, investments in technology for personalised guest experiences, such as mobile apps, virtual reality, or AI-driven recommendations, become crucial. What is more, investment in diverse amenities like wellness centers, cultural workshops, culinary experiences, and adventure activities help to better cater to experiential travellers.
How do you strike the right balance between financial considerations and innovative guest experiences?
Balancing financial considerations with innovative guest experiences in the hospitality industry requires a delicate equilibrium that hinges on strategic alignment and foresight. Financial prudence is crucial for sustainability and profitability, but equally important is the ability to offer unique and memorable experiences that resonate with guests. Achieving this balance involves a few key strategies.
Firstly, investing in innovation should be approached strategically, considering potential ROI and guest impact. It involves meticulous market research to identify trends and guest preferences, ensuring that innovation addresses real needs. Moreover, fostering a culture of innovation within the organisation encourages creative thinking without compromising financial stability.
Technology is key in improving the travel experience, from booking to on-site engagement. Investors are focusing on tech solutions like apps, VR, and interactive storytelling to elevate traveller experiences and stand out in the hospitality sector. By implementing efficient operational systems or tech solutions, hotels can streamline processes, freeing resources to allocate towards innovative offerings. Ultimately, striking this equilibrium requires a dynamic approach that recognises the symbiotic relationship between financial health and the delivery of exceptional guest experiences, ensuring sustained success in an ever-evolving hospitality landscape.
How do you view the integration of sustainable practices in hotel investments and the growing importance of eco-friendly initiatives in attracting guests and investors?
The importance of adopting sustainable measures in hotel investments is amplified by the rising focus on environmental management among both guests and investors. Hotels that embrace green practices not only meet their ecological obligations but also secure a competitive edge, as sustainability becomes a crucial factor for stakeholders.
The future of hospitality investments increasingly relies on embracing sustainable practices as they not only attract guests but also align with the expectations of socially responsible investors seeking viable, ethical opportunities.
Do you leverage tech advancements for operational efficiency and guest satisfaction?
Absolutely, leveraging technology advancements in the hospitality industry can significantly enhance operational efficiency and guest satisfaction. By effectively leveraging technology, the hospitality industry can elevate operational efficiency, deliver superior guest experiences, and stay competitive in an increasingly tech-driven market. The key lies in strategically adopting and integrating technologies that align with the hotel’s objectives and enhance the overall guest journey.
At Panchshil Realty, our key strategies for implementation include investing in a robust tech infrastructure that supports various systems, ensuring seamless integration and functionality and providing adequate training and support for staff to adapt to and effectively utilise new technologies, ensuring smooth operations. In addition, it includes implementing robust cybersecurity protocols to safeguard guest data and protect against cyber threats and staying updated with technological advancements, regularly upgrading systems to remain competitive and meet evolving guest needs.
What are the steps you are taking to address issues related to skilled labour and employee retention?
Community is at the very core of Panchshil and has always been integral to its identity. We take that role very seriously and whether that is through community outreach programs, the preservation of local culture or business partnerships, our work showcases, celebrates and empowers the community.
Addressing workforce challenges in the hospitality industry involves a multifaceted approach that values employee development, engagement, and well-being. By creating a supportive work environment and providing opportunities for growth and advancement, hotels can attract and retain skilled talent, thereby enhancing service quality and overall guest satisfaction. Enhancing employee skills through training, certifications, and career growth opportunities boosts competency and satisfaction. A positive, inclusive culture with diversity, open communication, recognition, and prompt issue resolution also aids in retention and engagement.
How do you manage to cater to ever-evolving guest expectations?
Catering to evolving guest expectations involves a dynamic approach, prioritising guest satisfaction, adapting to market trends, and delivering memorable experiences that resonate with the changing needs and desires of travellers. At Panchshil Realty, we constantly embrace innovation and latest trends to meet evolving consumer demands and maintain a competitive edge, amongst some of the other strategies I will elaborate on.
To begin with, we customise experiences for guests seeking personalised experiences tailored to their preferences, from room amenities to services offered. In order to so, we utilise guest data to understand preferences and behaviour, enabling tailored recommendations and services. Technology integration is another key part of our strategy. Not surprisingly, at our hotels, guests can expect seamless tech integration, from mobile check-ins to in-room smart features to digital concierge services. We also keep in mind increasing demand for contactless solutions, including mobile payments and digital communication channels.
We also lead the way when it comes to sustainability and eco-friendliness. As guests increasingly value sustainability, we ensure that our hotels implement eco-friendly practices, reduce waste, and promote sustainability initiatives.
With regard to health and safety measures, we adhere to stringent hygiene standards with heightened focus on cleanliness and health safety protocols, including visible sanitisation measures and health certifications.
Moving on, we lay great emphasis on local culture catering to guests seeking authentic experiences, including local cuisine, cultural activities, and community engagement.
Next up is our wellness and fitness offerings. We go to great lengths to cater to the increasing demand for wellness amenities, such as spa facilities, fitness centers, healthy dining options, and mental wellness programs.
Furthermore, we prioritise flexibility and convenience as guests appreciate flexible cancellation policies and booking options to accommodate changing travel plans and services like express check-out, online reservations, and quick service response times are also highly valued.
Guests are also inclined towards hotels that demonstrate social responsibility, ethical business practices, and community engagement and we make sure to cater to their demands.
It goes without saying that high-speed and reliable internet connectivity are considered essential for both leisure and business travellers and we ensure the same at all our hotels.
While at it, we make it our topmost priority to establish transparent communication regarding hotel policies, pricing, and services to build trust and loyalty.
Our hotels utilise data analytics and guest preferences to tailor experiences to individual needs. This may include personalised room amenities, curated dining options based on dietary preferences, and customised leisure activities.
But that is not all, we embrace innovation and new trends to meet evolving consumer demands and maintain a competitive edge.
In addition, we train and empower staff to provide personalised and attentive service that meets guest expectations and also continuously monitor industry trends, conduct market research, and stay informed about evolving consumer preferences.
How are you exploring the intersection of hospitality and real estate synergy for maximum returns?
The convergence of hospitality and real estate presents diverse opportunities to optimise returns, combining the strengths of both sectors to create innovative, profitable, and sustainable developments. Successful synergy requires strategic planning, market insights, and a deep understanding of both industries.
There are many benefits of synergy. On one hand, combining hospitality and real estate assets diversifies investment portfolios, reducing risk exposure across different sectors and, on the other, generates multiple revenue streams from hotel operations, residential sales/rentals, and retail/commercial spaces within the same development.
Furthermore, synergistic developments often lead to increased asset value due to combined offerings and shared amenities. Integrating hospitality and real estate strategically also fosters sustainable growth and resilience against market fluctuations. And last but not the least, hotels within mixed-use developments benefit from increased foot traffic and shared amenities, attracting guests and residents alike.
However, increasing synergistic developments is not without its fair share of challenges. To begin with, managing mixed-use developments requires effective coordination among various stakeholders, which can be complex. Moreover, there are hurdles like addressing legal and regulatory challenges in different sectors, such as zoning laws and property management, in mixed-use projects to deal.
Can you highlight some key strategies for mitigating risks in the volatile hospitality industry?
Mitigating risks in the hospitality industry requires a multifaceted approach that encompasses thorough research, financial prudence, operational efficiency, crisis preparedness, and adaptation to market dynamics. By implementing these strategies, we at Panchshil Realty are able to navigate the inherent volatility of the industry and protect their investments against potential risks.
To begin with, we spread investments across different market segments, geographic locations, or hospitality sectors to reduce exposure to specific risks. We also conduct thorough market analysis, feasibility studies, and demand forecasts before investing in a property or market, ensuring alignment with market conditions.
Furthermore, we go to great lengths to identify potential risks, including market fluctuations, economic downturns, geopolitical instability, and natural disasters, and develop mitigation strategies. Based on that, we develop contingency plans and risk mitigation strategies for various scenarios, ensuring preparedness for unforeseen events.
I must add that we always adopt a conservative financial approach by maintaining sufficient reserves, avoid overleveraging, and manage debt levels prudently to withstand economic downturns or unexpected crises.
In addition, we focus on long-term value and sustainability rather than short-term gains, making investments aligned with a clear and resilient business strategy. We also secure comprehensive insurance coverage for properties against potential risks like natural disasters, property damage, and liability.
With regard to adapting to market dynamics, we remain adaptable and agile to adjust strategies promptly based on changing market conditions, technological advancements, and evolving consumer preferences. As for operational efficiency, we implement efficient cost controls, optimise operational expenses, and adopt technologies that enhance efficiency without compromising service quality.
Talking of legal due diligence, we ensure compliance with local regulations, permits, zoning laws, and legal requirements to avoid legal pitfalls and penalties. At the same time, we seek expert consultation, advice and guidance from industry experts, consultants, and legal advisors to make informed decisions and navigate complex industry landscapes.
When it comes to crisis management and contingency plans, we develop robust crisis management protocols, including communication strategies and contingency plans to address emergencies.
And finally, with regard to customer and employee satisfaction, we prioritise guest satisfaction and employee well-being to maintain a positive brand reputation, reducing the impact of negative incidents.
Please elaborate on your vision for the future of Panchshil Realty’s hospitality ventures.
In the future, hospitality investment ventures will embody a fusion of innovation, sustainability, resilience, and diversification, catering to evolving market dynamics and investor expectations. The visionary outlook for Panchshil Realty’s hospitality ventures includes sustainability-centric investments, prioritising sustainable development, including green building practices, renewable energy integration, and eco-conscious operations. Our emphasis has always been on investments that positively impact the environment, local communities, and society at large.
Another key focus area is investments in innovative technology within the hospitality sector, including AI-driven guest experiences, IoT-enabled spaces, and data analytics for personalised services. Funding innovative solutions that enhance operational efficiency, guest satisfaction, and property management has always been one of our topmost priorities.
We also strongly believe in maintaining diversified portfolio strategies by investing in mixed-use properties combining hospitality, residential, commercial, and leisure spaces to diversify revenue streams as well including non-traditional accommodations to tap into evolving guest preferences.
Furthermore, funding properties and services catering to the growing demand for wellness, health retreats, and lifestyle-focused hospitality is also a priority, especially investments in resorts offering comprehensive wellness experiences, encompassing physical, mental, and spiritual well-being.
Our investment strategies hinges on agility and responsiveness, adopting investment approaches that swiftly adapt to market shifts, technological advancements, and changing consumer preferences. Our strategies integrate risk management, diversification, and flexibility to navigate uncertainties and mitigate investment risks.
We take our socially responsible investments very seriously as most of our investments are aligned with social responsibility, supporting ethical businesses, community development, and inclusive practices. This in addition to funding projects that preserve cultural heritage, promote cultural exchange, and contribute to the preservation of local traditions.
Collaborative investment models, joint ventures, and co-investment opportunities to leverage expertise, resources, and mitigate risk also appeals to us along with investments that bridge hospitality with technology, sustainability, healthcare, and other sectors to drive innovation and diversification.
By all accounts, our investments are focused on long-term value creation, sustainable growth, and resilience against market fluctuations and global disruptions with the incorporation of contingency plans, risk assessment, and crisis management strategies into investment portfolios to maintain stability during crises.
Not surprisingly, investing in forward-thinking concepts, disruptive technologies, and novel hospitality models to stay ahead of industry trends is our mainstay all the while maintaining adaptability to market trends and agility to pivot investment strategies in response to changing market demands, emerging trends, and technological advancements.
While at, we are firmly believers in people-centric investments as we wholeheartedly support investments that prioritise human capital development, talent acquisition, and employee well-being, acknowledging their role in success.
Furthermore, we also encourage investments that foster community engagement, empower local economies, and contribute positively to society. This vision foresees a hospitality investment landscape characterised by sustainability, innovation, diversification, and a profound commitment to creating value while positively impacting communities, guests, and the environment.
What is the rationale behind investing in emerging Indian markets and the potential they offer for hotel development?
Investing in emerging Indian markets for hotel development offers substantial growth prospects, but it requires a strategic approach, understanding of local dynamics, and an ability to navigate challenges inherent to emerging economies. Successful investments in India’s hospitality sector can yield substantial returns and contribute to the country’s evolving tourism landscape.
It is important to embrace the YOLO (You Only Live Once) mindset by curating offerings that cater to thrill-seekers, explorers, and those looking for unconventional, adrenaline-pumping adventures. This approach involves unique experiences such as tours or packages that offer distinct and offbeat experiences, such as extreme sports, remote destination explorations, or immersive cultural immersions that go beyond typical tourist attractions. Innovative dining and wellness-focused offerings, including personalized spa treatments, meditation pods, and holistic retreat programs, will cater to guests seeking culinary creativity and rejuvenation.
We need to cater to the adventurous spirit by providing opportunities for activities like skydiving, bungee jumping, cave exploration, wildlife safaris, or extreme hiking and trekking. It is about personalised and customised offerings that allow travellers to personalise their experiences, whether it is through tailor-made itineraries, unique accommodation options (like treehouses or glamping), or niche travel themes.
Another crucial but often overlooked aspect is utilising technology for unique experiences, such as augmented reality tours, interactive storytelling, or virtual explorations of otherwise inaccessible locations. While promoting thrill-seeking experiences, ensuring safety measures, and promoting responsible tourism to safeguard both travellers and the destinations visited. And lastly, we also need to encourage interaction with local communities, facilitating cultural exchanges, and promoting sustainable practices to ensure the well-being of local cultures and environments.
Incorporating the YOLO mindset involves incorporating the desire for exhilarating and unconventional experiences while maintaining a focus on safety, responsibility, and cultural appreciation. Balancing these elements creates a compelling offering that caters to the adventurous spirit of modern travellers seeking unforgettable moments and stories to cherish. Our one project at a time strategy in hospitality aligns with passion projects and our meticulous and detail-oriented approach, to deliver a high-quality outcome while ensuring efficient use of resources and sustainably focused efforts.
In summary, what would you say has been Panchshil’s reasoning behind its investments?
Our rationale for investment is manifold. To begin we see great potential as India’s hospitality sector is witnessing robust growth due to rising domestic and international travel, increasing disposable incomes, and a burgeoning middle class with a propensity for travel and luxury experiences.
India boasts diverse cultural, historical, and natural attractions, driving both domestic and international tourism, offering a vast market for hoteliers. As such, major cities and emerging urban centers are witnessing rapid infrastructure development, creating demand for hospitality services and accommodation options.
India’s robust economic growth, increased disposable income, and urbanisation, along with a booming tourism sector driven by domestic affluence and better transport infrastructure, offer ample investment opportunities in hospitality for domestic travellers. Enhanced connectivity from ongoing infrastructure projects, like airports and highways, boosts tourism and opens up investment avenues in emerging destinations. The growing need for quality business hotels and serviced apartments highlights the potential for profitable investments in the corporate hospitality sector, promising attractive returns and portfolio diversification in a rapidly expanding market.
Where do you see the most potential for hotel development?
Primarily, tourism hotspots and popular tourist destinations like Goa, Kerala, Rajasthan, and the Himalayan regions offer amazing opportunities for resort and leisure hotel developments.
Closing on its heels, major cities like Delhi, Mumbai, Bengaluru, and Chennai have a high demand for upscale hotels, catering to business travellers, conferences, and events.
Also fast catching up are tier II and III cities – these emerging urban centers witnessing economic growth present opportunities for mid-scale and budget hotel developments to cater to growing demand.
But that is not all. There are also specialised segments that are key focus areas. On the one hand we have niche markets such as wellness resorts, eco-friendly accommodations, and heritage hotels align with evolving consumer preferences while, on the other, we are integrating hotels with mixed-use developments, combining hospitality with residential, retail, and commercial spaces for diverse revenue streams.
Finally, what are the mitigation strategies you are adopting to pave the way for more success?
To begin with, collaborating with local developers, consultants, or hospitality groups familiar with the market dynamics and regulations can ease entry barriers. In addition, conducting in-depth market analysis, feasibility studies, and demand assessments help identify viable locations and segments.
Furthermore, flexibility to adapt to local preferences, innovate service offerings, and customise experiences for diverse guest demographics are the key to success.
And last but not the least, it is most important to adopt a long-term approach, recognising that emerging markets may require time to mature and generate returns on investment.