About Saj Hotels Limited

Saj Hotels is engaged in Hospitality industry. They provide a diverse portfolio of Business-to-Business (B2B), Business-toBusiness-to-Customer (B2B2C) and Business-to-Customer (B2C) hospitality offerings, spanning from traditional resort accommodation to villa rentals and restaurant and bar properties. They focus on providing comprehensive services to guests, including food and beverage options, recreational facilities and event hosting capabilities, reflecting a commitment to ensuring a memorable experience for their visitors.

They offer a range of accommodation options across various destinations, each tailored to provide comfort and convenience. Their resorts have well-appointed rooms and suites, complemented by a variety of dining venues including restaurants, bars and in-room dining services. Additionally, they are also developing villas named, ‘Saj Villas’ in Goa. These villas have carefully curated range of 2BHK and 4BHK options for guests; whether for family vacations, group gatherings or romantic escapes. The property will also have a swimming pool for enhanced guest experience. Saj Villas provides an ideal lodging solutions tailored to diverse preferences. 

In addition to their core hospitality offerings, they have strategically invested (50%) in a company called My Own Rooms Dot In Private Limited as associate. My Own Rooms Dot In Private Limited operates a resort named ‘Morjim Retreat’ in the vibrant destination of Goa. This resort offers a range of accommodations, including hotel rooms, shops, and spa facilities, catering to the diverse needs of travellers seeking a relaxing and rejuvenating experience.

HOTEL LEASING IN INDIA
Hotel investments are capital intensive and have a long gestation period. While the investor is expected to meet 100% of the investment (via equity and debt in a ratio acceptable to the brand), very often the absence of any guaranteed return reduces the investor universe considerably. Return-focused investors are increasingly seeking fixed or operating leases in hotels. As a result, over the last few years, hotel leasing has gained traction where hotel management companies assume the role of a lessee and participate in the development risk by investing capital in hotel projects. Most hotel lease contracts are negotiated for warm shell or fully fitted out structures. Having said that, investors always seek skin in the game from lessees in the form of capital commitments. The commercial terms of a hotel lease may vary based on the capital contribution of the investor and the lessee. 

Different leasing models can be used based on multiple factors, such as the risk appetite of the investor, quality and location of the asset, market strength and investment philosophy of the lessee.

According to WTTC, India is ranked 10th among 185 countries in terms of travel & tourism’s total contribution to GDP in 2019. According to WTTC, the contribution of India's travel and tourism sector to India's economy was worth Rs. 15.9 trillion (US$ 191.25 billion) in 2022. 

According to WTTC, over the next decade, India’s Travel & Tourism GDP is expected to grow at an average of 7.8% annually. In 2020, the Indian tourism sector accounted for 39 million jobs, which was 8% of the total employment in the country. 

In 2021, the travel & tourism industry’s contribution to the GDP was US$ 178 billion; this is expected to reach US$ 512 billion by 2028. By 2029, it is expected to account for about 53 million jobs. In India, the industry’s direct contribution to the GDP is expected to record an annual growth rate of 7-9% between 2019 and 2030. 

The travel market in India is projected to reach US$ 125 billion by FY27 from an estimated US$ 75 billion in FY20. The Indian airline travel market was estimated at ~US$ 20 billion and is projected to double in size by FY27 due to improving airport infrastructure and growing access to passports. The Indian hotel market including domestic, inbound and outbound was estimated at ~US$ 32 billion in FY20 and is expected to reach ~US$ 52 billion by FY27, driven by the surging demand from travellers and sustained efforts of travel agents to boost the market. 

By 2028, international tourist arrivals are expected to reach 30.5 billion and generate revenue of over US$ 59 billion. However, domestic tourists are expected to drive the growth, post-pandemic. International hotel chains are increasing their presence in the country, and they will account for around 47% share of the tourism and hospitality sector of India by 2020 and 50% by 2022. 

As per the Ministry of Tourism, Foreign Tourist Arrivals (FTAs) in October 2023 were 8,11,411. FTAs during the period JanuaryOctober 2023 were 72,43,680 as compared to 46,55,160 in January-October 2022. 

The percentage share of Foreign Tourist Arrivals in India during October 2023 among the top 5 ports was highest at Delhi Airport (34.74%) followed by Mumbai Airport (14.75%), Haridaspur Land Check Post (9.03%), Chennai Airport (7.05%), Bengaluru Airport (5.71%). FTAs during the period January-September 2023 were 6.43 million. 

The percentage share of Foreign Tourist Arrivals in India during October 2023 among the top 5 source countries was highest from Bangladesh (21.41%), followed by USA (15.65%), UK (11.27%), Australia (4.38%) and Canada (3.81%). In 2023-24 (January-October), 24.97% of foreign tourists visited for Indian Diaspora which marks 72,43,680 foreigners.

FEE during the period January-October 2023 were US$ 22.32 billion. 

Domestic visitor spending increased by 20.4% in 2022, only 14.1% below 2019. International visitor spending rose by 81.9% in 2022, but still 40.4% behind 2019 numbers. 

Cumulative FDI equity inflow in the Hotel and Tourism industry is US$ 17.29 billion during the period April 2000-September 2023. This constitutes 2.60% of the total FDI inflow received across sectors.

The growth in the services sector also remained strong in FY23, largely driven by the contact-intensive services sectors. This sector completely recovered to the pre-pandemic level in FY23, driven by the removal of mobility restrictions, the release of pent-up demand, and near-universal vaccination coverage. PMI Services remained in the expansionary zone throughout the year, supported by improvement in new business intakes, increased orders placed, and flagged price pressures of inputs and raw materials post October 2022. Trade, Hotels, Transport, Communication and Services related to Broadcasting and Financial Real Estate & Professional Services are major drivers of the growth in this sector. 

The Hotel Industry began a strong recovery in FY23, with the hotel occupancy rate surpassing the average pre-pandemic level of FY20 in Q4, accompanied by a rise in Average Daily Rate (ADR) and Revenue per Available Room (RPAR). The growth in the hospitality sector was driven by domestic leisure travel growth, the resumption of business travel in the country, as well as wedding and social events. Small-to-medium-sized domestic MICE (Meetings, Incentives, Conference, Exhibitions) events also made a comeback, fuelling demand for hotels. The tourism sector also showed signs of revival, with Foreign Tourist Arrivals (FTA) in India close to the average pre-pandemic level in Q4 of FY23, supported by the resumption of scheduled international flights. With the removal of pandemic-related restrictions, a surge in corporate travel and a rebound in MICE tourism and Bleisure1 travel, domestic air passenger traffic surpassed the pre-pandemic level in Q4 of FY23.

Staycation is seen as an emerging trend were people stay at luxurious hotels to revive themselves of stress in a peaceful getaway. To cater to such needs, major hotel chains such as Marriott International, IHG Hotels & Resorts and Oberoi hotels are introducing staycation offers were guests can choose from a host of curated experiences, within the hotel. India’s travel and tourism industry has huge growth potential. The industry is also looking forward to the expansion of e-Visa scheme, which is expected to double the tourist inflow in India. India's travel and tourism industry has the potential to expand by 2.5% on the back of higher budgetary allocation and low-cost healthcare facility according to a joint study conducted by Assocham and Yes Bank. 

It is irrefutable that the tourist industry is becoming a more significant economic force and has the potential to be used as a tool for development. The tourist industry not only drives growth, but it also raises people's standards of living with its ability to provide significant amount of diverse employment opportunities. It promotes environmental preservation, champions diverse cultural heritage, and bolsters international peace. By 2028, Indian tourism and hospitality is expected to earn US$ 50.9 billion as visitor exports compared with US$ 28.9 billion in 2018.

SAJ HOTELS LIMITED COMPETITIVE STRENGTHS
1. Location Advantage
2. Diverse Revenue Streams
3. Experienced Management Personnel
4. Customer Experience
5. Community Integration

SAJ HOTELS LIMITED STRATEGIES
1. Brand Expansion
2. Sustainable Architecture
3. Marketing Engagement
4. Dynamic Pricing Structure
5. Commitment to Quality Assurance

SAJ HOTELS LIMITED RISK FACTORS & CONCERNS
1. A parcel of land on which one of their resort property is constructed (Saj in the Forest, Pench) is taken on leasehold basis under a Joint Venture arrangement.
2. One of their properties is situated in proximity to the Pench National Park, may be subject to regulatory as well as government restrictions which might adversely affect their business and financial position.
3. A portion of their resort bookings originate from online travel agents and intermediaries.
4. The land parcels on which the registered office of their Company is located, has been leased out to Mahindra Holidays & Resorts India Limited.
5. They are exposed to risks associated with the development of their resort properties.
6. The operations of the Company are mainly carried in states of Maharashtra, Madhya Pradesh and Goa, and any adverse developments affecting these resorts or the regions in which they operate, could have an adverse effect on the business.