About Travel Food Services Limited
BUSINESS OVERVIEW
Travel Food Services is the leading player in India's airport Travel QSR and Lounge sectors, based on revenue in Fiscal 2025, according to the CRISIL Report. The company holds a 26% revenue market share in the airport Travel QSR segment and ~45% in the Lounge segment.
The Travel QSR business includes a diverse portfolio of 127 in-house and partner F&B brands, operating 442 outlets across India and Malaysia as of March 31, 2025. Most outlets are located in airports, with some on highways. The Lounge business includes 37 lounges across India, Malaysia, and Hong Kong, primarily serving premium-class passengers and select card or loyalty program members.
Presence spans 14 Indian airports, including 13 of the top 15 by passenger traffic, collectively accounting for 74% of India’s air passenger traffic in FY25. Additionally, operations extend to three airports in Malaysia and one in Hong Kong.
As of March 31, 2025, the company operated the largest network of Travel QSR outlets in India with 384 out of 413 outlets located in airports. It also managed the largest network of private airport Lounges with 28 lounges across 10 Indian airports.
SSP Group, a FTSE 250 company listed on the London Stock Exchange, is a global leader in the Travel F&B sector. SSP operates over 3,000 F&B and Lounge outlets across 600+ locations in 38 countries as of May 31, 2025, with a portfolio of ~550 brands and bespoke concepts. Travel Food Services leverages SSP’s global brand relationships and corporate governance practices.
K Hospitality, owned by the Kapur Family Trust, is a prominent player in India’s food services industry, with a presence in 35 cities and business verticals including QSRs, restaurants, catering, and banquets under brands like Copper Chimney, Blue Sea Catering, and LifeCo Services. Travel Food Services benefits from K Hospitality’s 50+ years of F&B expertise, strong supplier network, and operational know-how. As of March 31, 2025, they had 5,331 on-roll employees and 191 off-roll employees. The Bankers to the Company are Kotak Mahindra Bank Limited, ICICI Bank Limited, HDFC Bank Limited, The Hongkong and Shanghai Banking Corporation Limited and YES Bank Limited.
INDUSTRY ANALYSIS
India’s Travel and Tourism Industry
India’s travel and tourism industry continues to demonstrate strong growth momentum, supported by rising disposable incomes, a growing middle class, digital penetration, infrastructure expansion, and evolving consumer preferences. The organised & branded hotel sector and online travel agencies (OTAs) have emerged as key contributors to this growth. Furthermore, increased air connectivity and expanding airport infrastructure are accelerating the adoption of air travel across the country.
Geopolitical Tensions and Their Impact on Air Travel
Between May 7 and May 12, 2025, air travel in northern and western India faced disruption due to geopolitical tensions stemming from India’s cross-border military action against Pakistan. As a precaution, 32 airports in these regions were temporarily closed, leading to the cancellation of nearly 300 flights per day.
However, the situation was promptly stabilised, and all airports resumed operations by May 12, 2025. Daily domestic passenger traffic recovered quickly, reaching 0.46 million by May 21, 2025—almost on par with traffic figures from January to April 2025.
Separately, geopolitical uncertainties involving Turkey and Azerbaijan have led to advisories from online travel platforms urging Indian travellers to avoid these countries. This has triggered a shift in outbound travel demand toward alternative destinations such as Russia, Hungary, Czech Republic, Vietnam, Singapore, Bali, and Dubai.
Surge in Organised Hospitality and Online Travel Agencies
The demand for organised and branded hotels in India has significantly surpassed pre-COVID levels. Between FY22 and FY24, the segment registered an impressive CAGR of ~41%, with the industry estimated at ₹1,000–1,050 billion in FY25.
Online travel agencies (OTAs) have also shown robust growth, with gross revenues expanding at a CAGR of 54% between FY22 and FY24. Notably, the B2B OTA segment is projected to grow at 15–16% CAGR from FY25 to FY28, reaching ₹1,025–1,055 billion from the current base of ₹700–725 billion.
Indian Aviation Industry: Growth Trends and Drivers
India’s aviation sector is poised for sustained growth, backed by increasing demand for both business and leisure travel, an expanding middle class, and government-led initiatives such as UDAN (Ude Desh ka Aam Nagrik) under the Regional Connectivity Scheme (RCS).
Between FY15 and FY25, domestic and international passenger traffic grew at CAGRs of 9.1% and 4.2%, respectively. Even amidst the COVID-19 pandemic, the sector recorded modest growth of 1.8% (domestic) and 0.3% (international) between FY19 and FY24.
Airport Infrastructure and Fleet Expansion
India’s airport infrastructure is undergoing significant transformation. With a projected capital expenditure of ₹600–650 billion between FY25 and FY29, airport development remains a priority. This includes both greenfield airports such as Jewar, Navi Mumbai, and Bhogapuram, and brownfield expansions at airports in Bengaluru, Hyderabad, Guwahati, and Chennai.
These investments follow an earlier capex of ₹790 billion between FY20 and FY24 and are being propelled by government policies such as the Greenfield Airports Policy (2008), which has sanctioned 21 new airports—12 of which are already operational.
Airport Retail: A Rising Consumption Hub
Airport retail in India is evolving rapidly in tandem with the rise in passenger traffic and urban consumption patterns. Organised retail in the country is expected to reach ₹25–26 trillion by FY29 from ₹13 trillion in FY25, and airport retail is benefitting from this momentum.
With approximately 167 million domestic air passengers in FY25—representing ~12% of India’s population (compared to ~255% in the U.S.)—airport retail, particularly quick service restaurants (QSRs) and lounges, is flourishing. These two segments alone account for ~35% (₹64 billion) of the airport retail market in FY25.
Airport QSR and Food & Beverage Industry
The food and beverage (F&B) segment has become central to India’s airport retail ecosystem. Accounting for 34–35% of the total airport retail market, F&B offerings have advanced significantly in both product diversity and customer experience. Importantly, F&B remains a consumption need that cannot be served by e-commerce, reinforcing its importance in airport settings.
With airports becoming more than just transit hubs, they now serve as lifestyle destinations offering diverse dining, shopping, and relaxation experiences.
Airport Lounge Industry: Room for Expansion
Airport lounges in India offer travellers premium services including high-quality meals, quiet working spaces, relaxation areas, and additional amenities like showers and wellness options. Despite growing demand, India still lags behind international standards in lounge availability.
As of September 2024, India had around 90–100 operational lounges across 138 airports (~0.7 lounges per airport). In contrast, global hubs like London Heathrow operate 33 lounges for comparable passenger traffic. Delhi, Mumbai, and Bengaluru airports—India’s busiest—each host only 8–10 lounges, indicating significant growth potential in this segment.
Conclusion: A High-Growth Ecosystem with Evolving Dynamics
India’s travel and tourism sector is poised for strong expansion, driven by a blend of macroeconomic growth, infrastructure investments, digital adoption, and rising consumer aspirations. While geopolitical risks pose intermittent challenges, structural tailwinds in aviation, hospitality, retail, and digital travel services continue to create a robust and resilient ecosystem.
BUSINESS STRENGTHS
1. Market Leadership in Airport Travel QSR and Lounge Segments
The company was the leading player in India’s airport-based Travel QSR and Lounge sectors by revenue in Fiscal 2025, with the largest network of Travel QSR outlets—384 out of 413 situated in airports—and a 26% revenue share in the Travel QSR segment, as per the CRISIL Report.
2. Operational Expertise in High-Security Airport Environments
With 16 years of industry experience since launching the first Travel QSR outlet in 2009, the company has built robust capabilities to operate efficiently in complex, security-sensitive airport settings, strengthening its value proposition for airport concessions.
3. Long-Term Relationships with Major Airport Operators
The company maintains established partnerships with leading airports, including a presence at Delhi Airport (15 years), Mumbai (16 years), Bengaluru (6 years), and Chennai and Kolkata (11 years). It has served as the sole F&B and Lounge concessionaire at Chennai and Kolkata Airports since 2014.
4. Diverse Brand Portfolio Across Global, Regional, and In-House Offerings
Operates 127 F&B brands—90 franchised international and regional brands and 37 in-house brands. The portfolio includes KFC, Pizza Hut, Subway, Wagamama, Bikanervala, Third Wave Coffee, and proprietary brands such as Caféccino, Idli.com, Curry Kitchen, and Dilli Streat, offering tailored menus for varied traveler preferences.
5. Strong Understanding of Traveler Preferences
Focused on delivering customized dining experiences through a curated menu mix that addresses both local tastes and international expectations, aligned with airport operator requirements.
6. Experienced Management Backed by SSP and K Hospitality
Managed by a professional team averaging 24+ years of experience across hospitality, FMCG, IT, infrastructure, and retail sectors. Benefits from strategic support and brand synergies through SSP Group, a global Travel F&B leader, and K Hospitality, a legacy Indian F&B company with a 50+ year track record.
BUSINESS STRATEGIES
1. Enhance Like-for-Like (LFL) Sales through Optimised Offerings
Capitalising on the structural growth in Indian air passenger traffic, the strategy focuses on customising product offerings and services to increase LFL sales, i.e., revenue growth from the same set of outlets year-over-year.
2. Expand in Existing and New Markets
With air travel underpenetrated in India (0.27 trips per capita vs. 0.81 in China and 0.99 in Brazil, per 2023 data), the company plans to scale operations in current locations while entering new domestic and international markets.
3. Drive Operational Synergies and Scale Efficiencies
Emphasis on margin optimisation through data-driven category and menu management, coordinated with culinary and operations teams to improve product mix, ticket size, and profitability.
4. Maximise Capital Efficiency through Structured Allocation
Follows a rigorous capital review process, aligned with SSP’s investment model, ensuring capital is deployed efficiently. Proposals are vetted by designated committees or the Board, depending on investment thresholds.
5. Build Organisational Strength through People-Centric Culture
With 5,331 on-roll employees (as of March 31, 2025), the business is guided by the principles of Ownership, Transparency & Trust, and People First (OTP), embedding these values across all levels of the organisation.
BUSINESS RISK FACTORS & CONCERNS
1. High Dependence on Airport Operations
Travel QSRs and Lounges located at airports contributed over 95% of operational revenue for FY 2023–2025. Business continuity is highly reliant on concession agreements; failure to renew or secure new ones on favourable terms, or early termination, could adversely impact operations and growth.
2. Limited Agreement Tenure and Upcoming Expirations
Concession agreements typically have an average term of 8.21 years. As of March 31, 2025, 20% of such agreements are set to expire within the next three years. Non-renewal or inability to secure new agreements could reduce market presence and affect financial returns.
3. Revenue Concentration in Top 5 Airports
Top five airports—Bengaluru, Chennai, Delhi, Kolkata, and Mumbai—accounted for approximately 86–90% of operational revenue during FY 2023–2025. Any termination of agreements or decline in passenger traffic at these locations could significantly reduce revenue.
4. Brand Partner Dependence
Franchised brands contributed over 54% of Travel QSR revenue for FY 2023–2025. Inability to retain existing brand partners or onboard new ones may hinder business growth and profitability. Actions of brand partners beyond management control may also pose strategic conflicts.
5. Lounge Partner Dependency
Lounge services formed roughly 45% of operational revenue during FY 2023–2025. Revenue is dependent on contracts with airlines, card issuers, and loyalty programmes. Most agreements are renewed annually. Failure to retain key partners or sign new ones could negatively affect lounge operations.
6. Competition from Udaan Yatri Café
The Udaan Yatri Café initiative offers lower-priced food options at airports. This may divert footfall from Travel QSR outlets, reducing overall sales and profitability.
7. Customer Sensitivity to Airport Pricing
Food and beverage prices at airport outlets often carry surcharges compared to city locations. Perceptions of overpricing may deter customers, reduce revenue, and invite negative publicity.
Travel Food Services is heavily reliant on airport-based operations, brand partnerships, and lounge collaborations. Any disruption in concession agreements, brand/franchise relationships, or customer traffic—particularly at top airports—could severely impact revenue and growth. Additionally, pricing perception and government initiatives like Udaan Yatri Café pose competitive threats.
