Juniper Hotels set for luxury expansion in key Indian cities and IPO

Hyderabad: Juniper Hotels, co-owned by the Saraf Hotels and Hyatt affiliate Two Seas Holdings, is gearing up to give itself a New Year gift. The company is planning to float this late January or early February an Initial Public Offering (IPO), strategically focusing on developing large-scale luxury hotels in key metro cities such as Delhi, Mumbai, and Bengaluru. This departure from the mid-market segment is seen as a response to perceived lower profitability and increasing competition. Arun K. Saraf, Chairman and Managing Director of Juniper Hotels, highlighted the company's intent to tap into the growing demand for upper-upscale and luxury hotels during a recent conversation with Mint. He pointed out that the industry has experienced a consistent annual demand increase of approximately 10 per cent since the early 2000s in these categories. The company is optimistic about strong growth prospects, especially due to the projected negligible increase in the supply of new luxury hotels over the next five years.

In addition to these metro cities, Juniper Hotels is eyeing further development in Goa and Hyderabad, particularly with a focus on facilities for large conventions. This expansion aligns with the company's overarching goal of maximizing returns in a competitive market. Saraf emphasized Juniper Hotels' strategic shift from mid-market inventory hotels since 2014, focusing solely on asset ownership and development. This strategic pivot allows the company to leverage opportunities in the Indian hospitality market, emphasizing the need for rapid growth and fresh capital infusion.

The upcoming IPO aims to raise fresh capital of Rs1,800 crore, with Rs 1,500 crore allocated for deleveraging and future growth, and Rs 300 crore for general corporate purposes. Saraf underlined the abundant opportunities in the Indian hospitality market, emphasizing the need for rapid growth and fresh capital infusion.

Juniper Hotels' diversified business model extends into the development of commercial areas within its hotels, serviced apartments, and office spaces when feasible, leveraging its land holdings to maximize potential revenue streams. Currently, Juniper Hotels boasts around 1,950 keys across its portfolio, with plans to transfer an additional 1,000 keys from other businesses by 2027.

Juniper aims to bring in fresh capital through the IPO without altering its ownership structures. The partnership between Saraf Hotels and Two Seas Holdings dates back to 1998, marked by their collaboration on the Grand Hyatt Mumbai hotel project.

Juniper Hotels, directly linked to global hospitality giant Hyatt Hotels, plans to maintain brand agnosticism and is open to collaborations with any Indian or international hotel management firms, not restricted to Hyatt alone. The company's overarching goal is to own profitable large hotel assets in every market it operates in, with a keen focus on EBITDA and capital appreciation.

As the IPO date approaches, Juniper Hotels appears poised to capitalize on the growing demand for luxury accommodations in key Indian cities, setting the stage for a new chapter in its expansion strategy.