Now, as the Indian economy grew so did business travel and to cater to the needs of the value conscious Indian traveler emerged mid-scaled and budget hotels.
Ashish Jakhanwala saw opportunity in the growing hotel and hospitality market and founded Samhi in 2010. A hotel development and investment company Samhi has partnerships with the Marriott International, Royal Orchid and it’s already committed a total capital of Rs 330 crore in various hotel projects including four Green field and two acquisitions. Ashish is now looking at operating two more hotels out of Bangalore and Gurgaon by 2014.
No stranger to the hospitality industry, 37-year old Ashish Jakhanwala started out as a trainee. He spent four years with hotel facilities planning firm, two years with a hotel and financial consulting firm and finally seven years with Accor Interglobe Hotels. So, with 16 years of experience he decided to take the entrepreneurial plunge in 2011 and founded Samhi Hotels with partner Manav Thadani.
As a hotel ownership company that doesn't manage operations or the brand Ashish tells us what makes Samhi different.
Jakhanwala: We are not involved in the management of hotels, brands and we are not a brand ourselves. All we do is really build or buy hotels and asset mange them as an owner. We go with the best boys in the business to mange the show for us. So, this is an interesting thing that Samhi does or Samhi is capable of doing which a lot of my competitors in India can’t do. So, when they build a hotel, lets say when Taj builds a hotel. For us we invest in the location, so when we go to a location for demand, environment, growth and after that the next thing we do is find the best brand that fits that location, it could be any brand. It could be any hotel operator and this we believe gives us a unique advantage or an edge over the competitors.
It is this advantage that attracted global hospitality giant Marriott to enter joint venture with Samhi and commit USD 30 million for developing hotels in India.
Samhi also partners with Hyatt and Royal Orchid and has struck out investments worth more than USD 60 million including four Green field hotels and two acquisitions including the recently acquired Ahmedabad property from Royal Orchid. While its still early days Ashish feels his business model helps keep cost low.
Jakhanwala: We are asset owners and asset managers unlike a brand or an operator and that’s another big advantage. As we started by saying that our USP is that we are only asset owners and operators. We can really own a large portfolio of assets where a very lean management team which effectively means a very low corporate overhead cost.
As of today we are about 21 full time professionals in Samhi, we also have outsourced a lot of our activities like project management, construction management, procurement. We should be about 35-36 people. We believe that we will probably need to augment another 15 people to go upto about 50 people. That pretty much can support a company which can tomorrow have 30 hotels under its ownership. Now you compare that to a company which has branding and management.
Samhi got started with an infusion of USD 25 million from the GTI Capital Group for privately held investment firm founded by Gaurav Burman, Gaurav Dalmia Jonathan Schulhof, Madhav Dhar. Recently US based equity international has pumped in another USD 75 million into the venture but accessing capital isn’t the only challenge they have to deal with.
Jakhanwala: I think on a daily basis operative issues are there. Getting approvals, making sure you deal with the construction cost, you see how inflation has been in this country over the last two years, inflation is 15-20% in construction and certain items. On the other hand while the cost is going up in India for building hotels or buying hotels for that matter global institutional investors are only getting more and more worried. So, when we received our first funding in October India was great, there were problems but people thought these problems are short term. If you know what’s happened since October 2011 till October 2012 I don’t think there’s been a single positive news.
Economy is going to throw up plenty of nasty surprises and Ashish priced to seal a few moments away from uncertainty and volatility to keep himself grounded.
While the start has been strong Ashish is gearing up for expansion with an eye on building a 20 hotel portfolio by 2015.