About Valencia India Limited

BUSINESS OVERVIEW

Valencia India Private Limited, promoted by Keyur Patel, operates the "Valencia Club Abu" resort located in Moje Village Sakora, Abu Road, Sirohi, Rajasthan. The resort offers furnished accommodations along with restaurants, spas, kids’ clubs, and event facilities. Originally developed by Basil Buildcon Private Limited, the club was leased to Valencia in 2017, with a formal 9-year Lease and License Agreement executed on April 1, 2019, renewed annually. The leased space spans 35,000 sq. ft., including a Club Building, Admin Office, Banquet Area, and six Villas (Nos. 53, 63, 76, 77, 78, and 91) on plots of 27,000 sq. ft. each.

The company hosts weddings, corporate events, and private parties, and has a 10-year agreement with RCI affiliates (since October 24, 2017), giving members access to RCI’s Split Week Programme. As of November 30, 2024, 30 members avail this benefit. In 2024, Valencia acquired the Club Building and Villas 76 & 77, renewed leases for Villas 63, 78, and 91, and expanded by leasing 10 additional villas.

A major milestone was the 20-year lease agreement signed with Mahindra Holidays & Resorts India Ltd (Club Mahindra) on December 27, 2023, followed by an addendum on October 18, 2024. Due to this partnership, new member enrollments were discontinued, while existing members continue under previous terms.

The agreement includes refurbishment and construction of Club assets as per Club Mahindra’s standards, covering interiors, infrastructure upgrades, and essential systems. Valencia is also responsible for obtaining regulatory approvals, operational licenses, and insurance. The lease includes a 5-year lock-in period and is renewable upon mutual consent

As on May 30, 2025, the company have the total strength of 19 full time employees. The Banker to the Company is ICICI Bank Limited.

INDUSTRY ANALYSIS

Tourism & Hospitality Industry in India – Overview and Outlook

India, with its vast geographical diversity—from the Himalayas to tropical forests—offers immense potential for tourism. Rich in cultural heritage, biodiversity, and natural beauty, the country attracts both domestic and international tourists. The government is actively promoting spiritual and heritage tourism, developing tourist circuits in states like Uttar Pradesh, Uttarakhand, and West Bengal.

Tourism has become a key driver of economic growth in India's services sector and a major source of foreign exchange, contributing to job creation, infrastructure development, and cultural preservation. Post-pandemic recovery efforts by central and state governments have helped the sector bounce back to near pre-COVID levels.

Market Size and Growth Projections

• As per WTTC, India ranked 10th globally in tourism’s contribution to GDP in 2019.

• The sector's GDP contribution in 2022 was US$ 199.6 billion, with an expected annual growth rate of 7.1%.

• It is projected to reach US$ 512 billion by 2028 and create 53 million jobs by 2029.

• India’s travel market is expected to grow from US$ 75 billion (FY20) to US$ 125 billion (FY27).

• The hotel market, including all travel segments, is projected to rise from US$ 32 billion (FY20) to US$ 52 billion (FY27).

• The air travel market is expected to double to US$ 40 billion by FY27, driven by better airport infrastructure and increased passport access.

• Foreign Tourist Arrivals (FTAs) in 2023 reached 9.24 million, generating US$ 28.1 billion in foreign exchange earnings (FEE).

• Top FTA source countries in 2023: UAE, Bangladesh, UK, Australia, and Canada.

Tourism Trends and Key Drivers

• Domestic tourism is the primary growth driver post-COVID, supported by increased leisure travel and spiritual tourism.

• International hotel chains are expanding, with a 50% market share as of 2022.

• Rising demand for weddings, business travel, and tier-II city tourism is accelerating hospitality demand.

• Premium hotel occupancy is forecasted to reach 70–72% in FY24 and FY25, with average room rates between ₹7,800–8,000 (~US$ 94–96).

• Staycations have emerged as a strong trend, with hotel chains offering curated luxury experiences for domestic travelers.

Government and Institutional Support

• India Tourism Development Corporation (ITDC) plays a central role in developing tourism infrastructure, operating hotels, transport services, and event management.

• ITDC also engages in engineering consultancy, duty-free retail, and hospitality training through the Ashok Institute.

• The Ministry of Tourism collaborates with major industry bodies (FICCI, CII, FHRAI, etc.) and supports various segments like timeshare resorts, homestays, motels, and digital aggregators.

• The Incredible India Tourist Facilitator (IITF) programme offers online certifications to develop a skilled tourism workforce.

Rajasthan – A Key Tourism State

Rajasthan, India's largest state, features unique desert landscapes and the Aravali range, making it a top destination for heritage and cultural tourism. It consistently ranks high in both domestic and international tourist inflows, particularly during November to February. The Ministry of Tourism has piloted data collection surveys in Rajasthan to improve tourism planning.

Investment and FDI

• As of December 2023, the FDI inflow in the hotel and tourism sector stood at US$ 17.1 billion, constituting 2.57% of total FDI.

• The hotel industry is set for 7–9% revenue growth in FY25, aided by rising domestic demand, infrastructure improvements, and MICE (Meetings, Incentives, Conferences, and Exhibitions) events.

• Digital transformation across hotel chains is enhancing customer experiences, from booking to post-stay services.

Future Outlook

India’s travel and tourism industry is poised for long-term sustainable growth, supported by:

• Increasing domestic leisure and spiritual travel

• Government-led infrastructure development

• Expansion of e-Visa schemes to boost international arrivals

• Focus on sustainable tourism and job creation

By 2028, tourism exports are expected to reach US$ 50.9 billion, nearly doubling from 2018 levels. With rising global interest and domestic participation, the sector will continue to be a major economic contributor, fostering employment, cultural preservation, and international engagement.

BUSINESS STRENGTHS

1. Prime Location with Luxury Offerings
Valencia Abu is situated in a tranquil, scenic setting near local attractions, featuring well-appointed rooms, suites, villas, and cottages. The resort includes a swimming pool, multiple dining options, recreational areas, and customizable event spaces for weddings, corporate events, and family celebrations.

2. Family-Centric Holiday Experience
Designed to deliver a premium family holiday, the resort offers spacious villas, a multi-purpose hall, spa, gym, swimming pool, and family lounges—ensuring comfort, recreation, and relaxation for all age groups.

3. Personalized Guest Service
Trained staff delivers attentive, customized service tailored to individual guest preferences, enhancing satisfaction and fostering loyalty.

4. Robust RCI Affiliation
The RCI partnership provides access to a global vacation exchange network, strengthening market credibility and expanding offerings. Members benefit from flexible exchange programs and access to international resorts.

5. Experienced Leadership
Led by a promoter with over 20 years of industry expertise, the company benefits from deep sector knowledge, established credibility, and increased attractiveness to strategic partners, driving sustained business growth.

BUSINESS STRATEGIES

1. Capacity Expansion under Club Mahindra Partnership
Plans are underway to acquire or lease additional villas to scale up from 100 to 300 keys, enhancing the strategic alliance with Club Mahindra. This expansion aims to boost accommodation capacity, attract a wider customer base, and drive mutual growth.

2. Brand-Driven Market Expansion
The affiliation with Club Mahindra strengthens brand credibility and opens avenues for entry into new geographic markets. Leveraging Club Mahindra's network and brand equity facilitates customer acquisition and broader market penetration.

3. Integrated Operational Solutions
Focused on building end-to-end resort ecosystems by partnering with specialized agencies for property management and operations, ensuring efficient performance and enhanced guest experience

BUSINESS RISK FACTORS & CONCERNS

1. Dependency on Club Mahindra Lease Agreement
The company has entered into a 20-year lease agreement with Mahindra Holidays and Resorts India Limited (Club Mahindra), with a 5-year lock-in period for the lessee and a 20-year lock-in for the lessor. Termination by Club Mahindra after the lock-in period may adversely impact rental income, liquidity, and profitability, especially due to the absence of a revenue-sharing model and the requirement to re-market the resort.

2. Fixed Rent with Limited Upside Potential
The agreement stipulates a fixed rent with annual increments, which may not align with rental rate increases in the surrounding area. Consequently, the company will not benefit from room tariff hikes by Club Mahindra, limiting potential revenue growth.

3. Restrictions from RCI Agreement
The company is bound by a 10-year agreement with RCI affiliates (since October 24, 2017), which allows RCI to book resort rooms. This may limit room availability for in-house members, potentially causing member dissatisfaction and negatively impacting reputation and profitability.

4. Discontinuation of New Membership Enrollments
Following the Club Mahindra lease agreement, the company has ceased new member enrollments, leading to a decline in membership income. Though existing members will retain their benefits, this shift reduces a recurring revenue stream.

5. No Revenue Share from Club Operations
Under the current lease terms, the company only receives fixed rental income and has no claim on operational revenues generated by Club Mahindra. This model limits financial upside despite increased property usage or higher room occupancy.

Valencia India Private Limited faces key operational and financial risks stemming from its long-term lease dependency on Club Mahindra, limited revenue share terms, potential reputational issues from the RCI affiliation, and the discontinuation of new membership enrollments. These factors may affect the company's profitability, liquidity, and brand standing.