Chalet Hotels Limited (CHL), part of K Raheja Corp, on October 15, launched Athiva Hotels and Resorts, a premium lifestyle hospitality brand debuting 900 rooms across six hotels. The first property to become operational is Athiva Khandala, which was earlier The Dukes Retreat, about 85 km from Mumbai, set amid the Western Ghats. The other five properties include a business hotel in Navi Mumbai, The Resort at Aksa Beach (in Mumbai), and three greenfield projects, of which two are in Goa and one in Thiruvananthapuram.
For the past 25 years, Chalet Hotels has been an owner, developer, asset manager, and operator of high-end hotels and luxury resorts in India. Its portfolio includes 11 hotels and resorts, with 3,351 rooms, across international brands including JW Marriott, The Westin, and Novotel. By launching its own brand of hotels and resorts, the company is aiming to leverage its long-standing experience and expertise in the sector while gaining the advantages that a common brand brings with it.
In Q4FY25, Chalet Hotels had revenues of Rs 5,374 million, up 27 percent from Rs 4,244 million in Q4FY24. Ebidta margins of the company stood at 47.8 percent in Q4FY25, up from 44.5 percent in the corresponding quarter in FY24, while profits after tax increased to Rs 1,239 million from Rs 824 million in the same period.
A recent report by IDBI Capital estimates that domestic visitors in the Indian hospitality sector will double from 2.5 billion in 2024 to 5.2 billion by 2030, with a CAGR of 13.4 percent. It highlighted that, as of March 2024, only 11 percent of hotel rooms fell within the organised sector, while the luxury segment accounted for 17 percent of the sector. With rising incomes, and consequent demand, it is also the luxury segment in which there is a sharp gap between demand and supply.
In an interview with Forbes India, Sanjay Sethi, managing director and CEO, explains the rationale behind launching the brand and the advantages it brings. Athiva is aiming to attract domestic, affluent millennials by positioning itself as an “upper/upscale” brand, which can take advantage of the better margins that premium offerings bring, while sidestepping the volatilities and uncertainties that budget and luxury segments face, he says. Quite like the business class offerings from airlines.
Q. Chalet Hotels has been in the business for long enough, and has operated through a very different model. What prompted the decision to launch your own brand of hotels and resorts?
The answer probably lies in the question. We've been in this business for 25 years. Our expertise lies in developing hotels and giving it to brands to run. Over the years we've started operating more hotels ourselves, either in a franchise format or individually branded format. The latter doesn't make sense to continue because we were not creating a continuity for guests to go to the next property. So we decided to string them together with a common name and create a brand.
We have also created the material and springboard for launching an asset-light business at some point in time [in the future]. A brand gives us and our guests some commonality in what to expect when they go to different hotels owned and run by us; it gives us an opportunity to create value through the brand and address a larger market.
The other thing is legacy brands are growing rapidly in recent years, and their portfolios have become so big, especially the international ones. They have a handful of people in India to manage them; their ability to focus on individual assets is very low. So, the property owners have to drive those hotels anyway. And if I'm going to drive it, I might as well create value for my brand from it. We know how to build and operate hotels. Then why not create value for our company through a brand and focus on our own hotels?
Also Read: How Puneet Chhatwal has turned around the 120-year-old IHCL
Q. Is there a forecast or expectation of how much you can see the new brand contributing to your revenues over the next two to three years?
No. Percentage wise now it's very small; it's a single digit number. Athiva Khandala has opened on October 16; another two will open only early next calendar year. So there is a long way to go. What we are doing is basically adding value to the balance sheet through operating these properties ourselves by ensuring revenue leadership is maintained. We keep a close watch on costs, so that they continue to deliver industry-leading Ebidta margins, which we've done historically.
Q. What are the advantages of having a business model like Athiva, where you are not just operating it, but you own and develop the property as well?
First, if you are developing and designing it yourself, you are designing it very close to the brand that you have in mind; the alignment across the value chain is very strong. Second, the brand itself creates a soft value for the business. Third is our teams are getting more focussed on delivering customer expectations. We are also finding a niche for ourselves among affluent millennials.
With individual brands, we anyways have corporate costs, sales and marketing talent, distribution etcetera. But if I went to negotiate with an online travel portal I went with individual hotels. But now when I go, I have a bunch of hotels and can get the benefit of scale on contracts. That's what we hope to get.
The whole idea is that Athiva becomes a brand to reckon with in the next two or three years, and thereby add significant value to all stakeholders, not just the shareholders.
Q. And what are the challenges?
Right now we're doing only small hotels, and we are focusing on bringing under our brand hotels that have local demand dynamics. We don't want to put our own brand in hotels that have, say, 60 or 70 percent of the business coming from out of India. We don't have the distribution capabilities for that. So that is one challenge. And we anyway work with brands. So, we'll continue to grow that part of the portfolio for assets that deserve that. Assets that we can run successfully ourselves we will continue to put under our brand.
Q. You have spoken earlier about luxury or premium segments having different margins compared to mid-segment or budget hotels. How does seasonality and occupancy rate differ between these two categories?
There are two or three answers within this question. One is: Business hotels have more flatter lines in terms of demand because for them, typically, the second half of the year is better than the first. Leisure hotels depend on holiday seasons and weekends. So the cycles are opposite: Business hotels do very well from Monday to Friday, and go soft on the weekend, while leisure hotels do very good on weekends and go soft in the mid-week. From our perspective, for higher-end hotels these cycles, especially for business travellers, are less volatile because they are largely in the per diem of senior management. They are not going to scrimp on travel because there's more competition.
If corporates cut budgets because business isn’t growing, that's when they need to intensify the sales and marketing activities; they tend to travel a little bit more because they need to engage with stakeholders a lot more. Therefore, the upper/upscale segment is the sweet spot. If you look at monthly reports on category wise performance, the one segment that has consistently performed well in the past six months or last couple of years is the upper/upscale segment. The luxury segment has price challenges, plus there is a cost to develop, which is very high, and sometimes the returns don't make sense. In the upper/upscale segment, the returns make a lot of sense.
In the budget segment, margins are not low; they are a little more sensitive to geopolitical challenges because that segment of travellers will have their budget cut down if there's a challenge.
Q. So, it's the kind of difference between the business class and first class in aviation.
Yes. Business class does better than first class always, and margins are higher in business class than in economy. That's how we are.
First Published: Oct 17, 2025, 15:44
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