Pride Hotels IPO

Pride Hotels Limited IPO Strengths

Pan-India Reach and Diversified Portfolio

Pride Hotels Limited boasts a Pan-India presence with a strategically located and diversified portfolio of 34 operational hotels and resorts, comprising 2,723 keys as of the Draft Red Herring Prospectus. Its operations span four sub-brands across the upscale, upper midscale, and midscale segments, positioning the company as the fourth largest family-promoted domestic chain and the sixth largest in its segments in terms of chain-owned inventory as of June 30, 2025.

Full-Service Customized Properties

The company offers full-service hotels designed to meet diverse customer needs with customized properties. These include a variety of rooms (from Superior to Suites) and comprehensive amenities like over 50 F&B outlets, banquets, spas, and wellness centers. This diversified offering, which includes dedicated efforts for solo women travelers, attracts a broad clientele, thereby diversifying the revenue base and mitigating risks from industry seasonality.

Strategic Location Identification

Pride Hotels Limited possesses a core strength in accurately identifying property locations with high growth potential, leveraging over 38 years of market experience. This expertise allows the company to secure accessible, central locations in key business, leisure, and pilgrimage markets. This early-mover advantage, as seen in locations like Ahmedabad’s SG Highway, ensures properties are positioned for sustained demand and cultivate brand loyalty as surrounding areas develop.

Strong Brand Legacy and Indian Ethos

Operating under the well-recognized “Pride Hotels and Resorts” brand, the company has a strong legacy of over three decades in the Indian hospitality sector. The brand philosophy, “Truly Indian. Traditionally Luxurious,” integrates Indian culture into the guest experience through traditional welcomes, local artwork, regional music, and authentic regional Indian cuisines, appealing to a broad and diverse client base across its four sub-brands.

Asset-Light Model and Turnaround Expertise

The company employs an asset-light business model through its Managed Portfolio (27 hotels, 1,587 keys as of the DRHP date), which minimizes capital investment while expanding brand reach and enhancing total income. Furthermore, Pride Hotels Limited has a track record of acquiring and turning around underperforming properties, leveraging its management expertise to maintain low capital costs and drive robust financial performance, as evidenced by high PAT margins.

Focus on Operational Efficiency

Pride Hotels Limited prioritizes operational efficiencies and active asset management. This includes centralized procurement for cost savings, diligent monitoring of the Guest Satisfaction Index (GSI), and the adoption of renewable green energy solutions. Strategic asset management, like refurbishment and repurposing of spaces, along with consistent brand-building through campaigns such as “India Dekho with Pride,” collectively enhances service quality, brand visibility, and overall profitability.

More About Pride Hotels Limited

Pride Hotels Limited is a homegrown Indian hospitality brand with over 38 years of experience in owning, developing, operating, and managing a diversified chain of hotels and resorts under the “Pride Hotels and Resorts” banner. The company operates through two models: ownership of hotels (including via group companies) and hotel management agreements with third-party owners. As of the Draft Red Herring Prospectus, the company’s portfolio comprised 2,723 keys across 34 operational hotels, including seven owned hotels with 1,136 keys and 27 managed hotels with 1,587 keys. Among family-promoted hotel groups, Pride Hotels is the fourth largest domestic chain and ranks sixth in India in terms of owned inventory in the upscale, upper midscale, and midscale segments.

Growth and Milestones

Since commencing operations in 1987 with its first hotel in Pune, Pride Hotels has expanded to 32 cities across India, acquiring hotels in Ahmedabad, Nagpur, Chennai, and Kolkata, and building new properties in Bengaluru and New Delhi. In 2008, the company adopted an asset-light model through management contracts. Over the years, it has strategically diversified across business, leisure, and pilgrimage destinations.

Brand Portfolio

Pride Hotels operates under four distinct sub-brands:

• Pride Plaza: Upscale hotels catering to business, leisure, and social events in cities like Delhi, Ahmedabad, Jaipur, and Kolkata.

• Pride Premier: Upper midscale hotels focusing on accessibility and personalized service in regional hubs such as Nagpur, Pune, Indore, and Mussoorie.

• Pride Elite: Midscale hotels targeting leisure travelers in scenic and culturally significant locations, including Haridwar, Dwarka, and Daman.

• Biznotel by Pride: Midscale properties aimed at business travelers and transit guests in cities like Surat, Vadodara, and Bharuch.

Revenue Streams and Operations

Pride Hotels derives revenue from both room and non-room services, including F&B outlets, banquets, spas, fitness centers, retail, and event management. The company operates over 50 F&B outlets and 90 banquet halls with a combined area of approximately 350,000 square feet, capable of hosting events for 10 to 3,000 guests. Its client base spans major corporates such as SpiceJet, Adani, Air India, and travel partners including MakeMyTrip, Booking.com, and Cleartrip, providing diversified and stable revenue channels.

Strategic Positioning

The company’s owned hotels are located in top markets contributing nearly 47% of air traffic and 36% of hotel inventory supply. Prime locations, such as Pride Plaza Aerocity in New Delhi, Pride Premier Pune, and Pride Plaza Ahmedabad, highlight the focus on gateway connectivity and business travel. Pride Hotels also maintains a strong pipeline of 21 hotels under development and 11 additional properties under letters of intent, ensuring growth across business, leisure, and pilgrimage segments.

Industry Outlook

The Indian hospitality industry is undergoing a significant transformation, underpinned by strong domestic travel demand and a revival in business events. In FY2024, the overall market revenue reached approximately US$281.8 billion, with national occupancy around 68%, average daily rate (ADR) about US$97, and revenue per available room (RevPAR) near US$66.

Growth Prospects & Key Figures

• Forecasts suggest revenues could reach US$541.7 billion by 2030, implying a compound annual growth rate (CAGR) of circa 14% from 2025 to 2030.

• Another estimate projects a market size of US$798.95 billion by 2033 (from US$243.56 billion in 2024), yielding a CAGR of about 14.1% for 2025–2033.

• Specific to hotel rooms, demand is expected to grow at about 9.7% CAGR through FY2028, while roomsupply growth will lag (~2.5% CAGR), creating a favourable demandsupply gap.

Growth Drivers

• Rising domestic travel (leisure, weddings, pilgrimage) and increasing business/MICE (meetings, incentives, conferences, exhibitions) activity are central growth drivers.

• Improved air connectivity, infrastructure development, and government tourism initiatives, such as tax incentives and increased investments, also bolster the sector.

• Shift in consumer behaviour: greater demand for midscale to upscale branded hotels, stronger interest in destination stays, tierII/III city expansions, and branded leisure concepts.

Outlook for Hotel Operations (Rooms and NonRooms)

• For the hotel segments relevant to branded chains (upscale, upper midscale, midscale), occupancy is estimated to rise to 7075% in the near term, and ADRs are expected to increase as demand outpaces new supply.

• Nonroom revenue streams, including food & beverages, banquets, spas, and event spaces, will continue to gain importance, supported by social events, weddings, and corporate gatherings.

• The assetlight management/contract model is likely to dominate growth strategies as hotel chains seek lower capital intensity and faster footprint expansion.

Challenges & Key Considerations

• While demand is strong, margin pressure remains due to rising operating costs, the need for skilled manpower, and fragmented regulatory landscapes across states.

• Oversupply in some markets and intense competition, especially in midscale and transit segments, may moderate growth in certain locations.

How Will Pride Hotels Limited Benefit

• Pride Hotels Limited is well-positioned to capitalise on the growing domestic travel and leisure demand, especially across tier-II and tier-III cities.

• The company’s diversified portfolio across upscale, upper midscale, and midscale segments allows it to capture demand from multiple customer segments, including business, leisure, and pilgrim travelers.

• Increasing occupancy and higher ADR trends in the hospitality sector are likely to improve the revenue and profitability of Pride Hotels’ owned and managed properties.

• Growth in non-room revenues, including F&B, banquets, spas, and event services, provides additional income streams and reduces reliance on room revenue.

• Expansion through asset-light management contracts enables faster scaling with lower capital intensity, increasing operational efficiency and reach.

• Strong brand recognition and a national presence in key business, leisure, and pilgrimage markets allow Pride Hotels to capture both domestic and inbound travel demand.

• Strategic locations near airports, business hubs, and popular destinations enhance the company’s ability to attract corporate and high-value customers.

• The rising trend of destination weddings, corporate events, and social gatherings presents significant ancillary revenue opportunities.

• Overall, the industry’s robust CAGR and favourable demand-supply gap support Pride Hotels’ long-term growth strategy.

Peer Group Comparison

Name of Company	Face Value (₹ per share)	P/E – Based on Diluted EPS	EPS – Basic (₹)	EPS – Diluted (₹)	RoNW (%)	NAV (₹ per share)	Revenue from Operations (₹ million)
Pride Hotels Limited	5.00	4.50	4.50	4.50	20.00%	22.50	3,056.20
Peer Group
Indian Hotels Company Limited	1.00	57.83	13.40	13.41	7.96%	79.70	83,345.40
ITC Hotels Limited	1.00	77.69	3.05	3.05	5.74%	53.36	35,598.10
EIH Limited	2.00	33.15	11.82	11.82	16.83%	73.15	27,431.46
Schloss Bangalore Limited	10.00	212.97	1.97	1.97	0.82%	209.70	13,005.73
Lemon Tree Hotels Limited	10.00	69.88	2.48	2.48	14.91%	20.60	12,860.78
Apeejay Surrendra Park Hotels Limited	1.00	40.24	3.92	3.92	6.51%	60.17	6,314.50
Kamat Hotels (India) Limited	10.00	19.85	15.96	15.61	7.03%	92.79	3,569.70
Royal Orchid Hotels Limited	10.00	29.33	17.23	17.23	20.08%	86.27	3,194.70

Key Strategies for Pride Hotels Limited

Strengthening and Expanding the Brand Portfolio

The company plans to cultivate a robust portfolio by enhancing its four core brands and launching the upper-upscale ‘Pride Luxe’ brand. This includes using performative marketing and strengthening the ‘Pride Privilege’ loyalty program to boost direct bookings, brand awareness, and customer retention across the upscale to midscale segments.

Pan-India Network Expansion Strategy

Pride Hotels will expand its hotel network through an asset-light Managed Portfolio model, deepening its presence in existing high-growth markets and entering new geographies. It aims to develop a cluster-based strategy in underpenetrated Southern and Eastern India, while selectively pursuing strategic, turnaround-potential Owned Portfolio opportunities.

Capacity Expansion and Upgradation

The strategy involves expanding capacity and upgrading facilities at selected properties to capitalize on local economic growth and meet evolving customer preferences. This includes key renovation projects, increasing the number of keys at properties like Nagpur, and adding premium amenities such as larger banquet halls, spas, and fitness centers to boost market positioning and asset value.

Consolidating the Food & Beverage Portfolio

Pride Hotels intends to consolidate and strengthen its F&B portfolio by ensuring each property features at least one of its proprietary dining brands (e.g., Casablanca, Puran Da Dhaba). This move aims to standardize quality, drive brand recall, enhance cross-selling, and consistently increase the valuable non-room revenue stream.

Continuous Operational Efficiency Improvement

The company will improve operational metrics (ADR, RevPAR) by investing in new technology (e.g., cloud-based systems) and strengthening data analytics for personalized services and dynamic pricing. It will also upgrade procurement, improve staff productivity, and deploy sustainable measures to lower costs and enhance overall efficiency.

Exploring Lease Models and Inorganic Growth

Pride Hotels will diversify its expansion strategy by introducing a third model: long-term hotel leasing, complementing its Owned and Managed Portfolios. This capital-light approach, alongside evaluating inorganic growth opportunities through acquisitions, will accelerate market entry, achieve scale rapidly, and strengthen its presence in key locations.