Sayaji Hotels to spread out with Rs 510 cr

MUMBAI: Indore-based Sayaji Hotels, which owns the Barbecue Nation chain of restaurants, has charted out an investment of Rs 510 crore over the next two years. Part of the spend will go into its business hotels, too.

Sajid Dhanani, managing director, Sayaji Hotels, said, “We are going aggressive with our restaurant business. We are launching our Kolkata restaurant next month and we are also developing two hotel properties.”

The company aims to grow its 11 outlet restaurant chain to 100 outlets across the country by 2010. It is spending Rs 3.5 crore per restaurant and developing each property in 100 days.

The restaurant business currently generates average sales of Rs 42 lakh per month.

An analyst with a foreign brokerage said, “Restaurant business is a high revenue generator with large visibility if you have a national presence, and Sayaji’s business model makes it easier for them to achieve breakeven early.”
 
Meanwhile, Sayaji is setting up its third hotel at Pune, due to be operational by December this year. The 247-key property, in the mid-market segment that includes business travelers and leisure travellers, would soak up Rs 135 crore. It has a business hotel each in Indore and Baroda.

Meanwhile, faced with competition from ITC’s Fortune hotel at Indore, Sayaji has decided to expand its property there.

The expansion, from the current 200 keys to 450, will cost Rs 22 crore and be completed in the next 15 months, said Dhanani.

“We are also expecting to increase our average room rates by 25% in financial year 2009.” Following this year’s tariff hike, it charges Rs 3,500 per room per night.