Leading Brigade to Victory

“BORN IN France but made in India,” said Jean-Michel Casse, Senior Vice President Operations, AccorHotels India as he shook hands with M R Jaishankar, Chairman and Managing Director, Brigade Group at the launch of the Grand Mercure hotel in Mysore in the last week of April. Jean-Michel was referring to the hotel’s French (AccorHotels is a French company) and Indian heritage as the hotel is owned and built by Bangalore-based Brigade Hospitality, part of the Rs 1700-crore Brigade Group, that is looking at becoming a major player in the hospitality sector in South India.

While the 146-room Grand Mercure, Mysore is Brigade’s third hotel, the company has over 12 hotels in the pipeline and expects to have over 1500 rooms by 2020. “By 2020 we will have about 15 hotels. We would like to reach 20, but I’m not sure if that will happen. Fifteen is what we are aiming at. Of these 10 are either functional or tied up,” says Jaishankar.

In 2013, it entered into a 10-hotels deal with the InterContinental Hotels Group (IHG) and work has already started on several of them. The first of the lot that will be launched is the Holiday Inn at Chennai. The 202-room hotel will be launched in August or September this year. Next is the 274-keys Holiday Inn Express and Suites, Bangalore that will be launched in the first quarter of 2017. The 150-room Holiday Inn Express and Suites being constructed on top of a mall at the Brigade Golden Triangle, on the Old Madras Road in Bangalore will be operational by early 2019. The hotel is part of a mixed use complex comprising residential, commercial and retail space. Another Holiday Inn Express and Suites will come up at Bangalore airport by 2019.

Besides the Holiday Inns, Brigade is also constructing a 212-room hotel at the Kochi Infopark which will be run by Four Points by Sheraton and will be operational by end 2017.

Brigade has also made a foray outside South India and is constructing a 168-room hotel at GIFT city, India’s first smart city in between Ahmedabad and Gandhinagar in Gujarat. The hotel will be operational by 2019 and will be run under the brand Ibis Styles. Incidentally, it will be the first Ibis Styles hotel in the country.

The additional rooms will be built at an investment of Rs 700-800 crore and the investment will be funded through a mix of debt and internal accruals. “For all our hotels we already own the land. It has either been acquired recently or was already with us. No funding is required for the land as such. For the construction we do need funding. It will be funded through financial institutions and through internal resources,” says Jaishankar.

It all started seven years ago when Brigade built its first hotel in Koramangla, Bangalore. The hotel was initially constructed as a service apartment under the Brigade Homestead Residences brand (which has since been discontinued). However, it was decided to outsource it to a third party and run it as a hotel. Brigade tied up with AccorHotels and the Koramangla property came to be called as the Grand Mercure, Bangalore. The hotel has been doing exceptionally well having consistently recorded the highest average occupancy in the city at 87 per cent.  

“The success of the Koramangla property gave us the confidence to do another hotel in the north-west of Bangalore,” says Jaishankar. Soon the Sheraton was operational as part of Brigade Gateway, an integrated complex. 

“Last year Sheraton upgraded the branding to Sheraton Grand. Only 10 hotels in the world are classified as Sheraton Grand and ours is the only hotel in Asia to be classified as one,” says Jaishankar proudly. The Sheraton Grand recorded an 82 per cent average occupancy last year. 

Brigade Hospitality was set up in 2004 as a wholly-owned subsidiary of the Brigade Group. Before foraying into hotels, the company was focussing on professionally managed lifestyle clubs (it has five such clubs in Bangalore) and convention centres.

Today Brigade Hospitality’s revenue is around Rs 200 crore which is about 12 per cent of the group’s total revenue. “We want to increase it to Rs 350 crore in the next three years,” says Jaishankar.

Jaishankar expects maximum demand for budget and non-star hotels. This will be followed by demand for 3-and 4-star hotels. Accordingly Brigade Hospitality is focussing in 3-to-4-star hotels. “We are present in all categories but our focus will be on 3-to-4-star hotels. We are looking at luxury hotels also but that will depend on the right location, cost of land, etc.,” says Jaishankar.

Most of Brigade’s hotels are in the IT corridors and cater to the business traveller. 

“We came to Mysore because it receives the largest number of tourists in Karnataka. But it is under served as far as quality rooms are concerned. The big brands are only just beginning to come,” explains Jaishankar. Besides hotels, Brigade Hospitality has recently ventured into industrial catering, banquets and event coordination under the umbrella of Celebrations Catering and Events. It serves almost 6500 meals daily for employees at Microsoft, ABB, etc.

It also has another brand called The Baking Company which began as an in-house patisserie located at the various Brigade lifestyle clubs for residents and has now expanded to commercial outlets at the Orion and Orion East Mall in Bangalore. Currently there are six outlets of The Baking Company and three more are likely to be rolled out over the next few months. As Brigade Hospitality prepares to launch a couple of more hotels over the next 10 months, the company’s future appears bright.