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The Collection Wed, 03 Sep 25 |
Multiple stories, multiple perspectives, one theme worth your time—every week. |
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Have you heard of branded residences?
Top-tier ultra-luxury homes, often in the same premises as (or adjacent to) some of the country’s most luxurious resorts and hotels, and managed by the same operators who are used to lavishing attention and hospitality on hotel guests.
In fact, the easy access to such five- and four-star services and amenities are one of the biggest draws of branded residences.
To quote a 2024 report from hotel advisory firm Noesis:
Each project offers a set of ‘core’ services that are part of annual service charges, and ‘a-la-carte/on-demand’ services which are optional and subject to additional charges when utilised. Some core services include clubhouse access (gym, swimming pool), 24/7 security, valet parking, and hotel loyalty-program benefits. On-demand services include spa appointments, personal trainer sessions/programs and in-room dining. The final set of core and on-demand services do have variations across properties, particularly depending on the type of audience/market the project is catering to.
And pretty much every one of India’s top hospitality chains seems to want to get in on this action. Indian Hotels (IHCL), The Leela, Marriott… all of them have either already launched branded residence projects, have one in the works, or both.
To be clear, this isn’t a flight from one flagging sector to a more attractive one.
For many hotel chains, the April–June quarter (Q1) seems to be the weakest in terms of revenues and average room rates (ARR), according to data from a report by brokerage Motilal Oswal. But in Q1 this year, most major hotel chains—including Indian Hotels (Taj, Ginger), EIH (Oberoi Hotels), and Lemontree—saw a double-digit year-on-year growth in ARR.
The brokerage also predicts that this will be sustained throughout the year.
…this will be majorly driven by an increase in ARR and higher occupancy rates, alongside continued traction in MICE (meetings, incentives, conferences, and exhibitions) activities such as cultural events and a strong wedding season in 2HFY26.
As we’ve written multiple times before, luxury homes are one of the fastest growing segments in Indian real estate. And Indian hotels, with already strong capabilities, experience, and infrastructure in exactly the kind of services the rich and ultra-rich want, think this is a natural space for them. To quote from a recent Business Standard report:
“Apart from the luxury and midscale segments, I firmly believe that branded residences will gain traction. That is how the market is evolving, and we are going to do more of it now,” Puneet Chhatwal, managing director and chief executive officer (MD & CEO) at IHCL.
And these projects can be lucrative ones.
Even as early as the end of 2023, average square-foot prices for Indian branded residences were shooting through the roof.
| Prices in rupees. Source: Noesis |
Of course, this isn’t the only major shift Indian hospitality chains have attempted in the last few years. And I thought I’d take this opportunity to showcase some of the stories The Ken has written about the segment.
Take, for instance, Indian Hotels (IHCL), which has over 380 hotels across the country and offers rooms ranging from Rs 4,000 per night—if you visit its budget chain Ginger—to more than Rs 50,000 per night.
In November 2024, my colleague Seetharaman G wrote about how Ginger had brought about a reversal of fortunes for itself by adopting some new strategies.
Tata-owned Indian Hotels’ art of being all things to all people
Five years ago, the story couldn’t have been more different
There’s also ITC Hotels, with 140+ properties offering both luxury and budget stay options. Despite a weak listing, the company seems set “for good times ahead”, with stock prices up nearly 45% since the beginning of the year.
ITC Hotels: 0, Indian Hotels: 1
India’s second-largest hotel chain is open for business on the bourses, but investors aren’t checking in
Ventive Hospitality, meanwhile, is way smaller than the two giants we just spoke about. But it does stand out in one key aspect: it’s able to charge far more per room than its rivals.
The pint-sized Indian Hotels rival punching above its weight
How Blackstone-backed Ventive Hospitality makes up for its small footprint
We also interviewed Kapil Chopra, the founder of luxury hotel group Postcard Hotels, for our leadership podcast last year.
First Principles • 40 |
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And to wrap things up, there’s Oyo*, which, last week, secured a nod from its board for a fresh IPO—its third attempt. Still, the main question around Oyo’s IPO is not when it will happen, but what exactly it will take public.
Ritesh Agarwal’s hat has no rabbit
A delayed IPO. Top-notch rivals. Demanding investors. It’s only going to get harder for Oyo
If you have any thoughts to share with us, write to [email protected]. We’ll see you again with another collection next week.
*Dayzero Holdings, of which Oyo founder and CEO Ritesh Agarwal is a director, is an investor in The Ken.
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Rahul leads the promotion and distribution efforts for the journalism produced by The Ken. He works at the intersection of the publication's editorial and business operations.
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