Samhi Hotels Ltd said its acquisition of boutique hospitality platform Rare India is driven by a strategic push to enter the leisure travel segment through an asset-light model while continuing the focus on its core competence of tier-one business hotels.
Recently, Samhi said it was acquiring a 70% stake in Rare India in two tranches for a total consideration of ₹47 crore.
“The first rationale is our entry into the leisure segment in a scalable manner. The second is that this is Samhi’s first asset-light investment where, after the initial capital commitment, the platform can scale up with minimal additional capital,” said Samhi Hotels MD and CEO Ashish Jakhanwala during an earnings call.
This transaction represents the company’s first asset-light investment and provides an opportunity to tap into the fast-growing experiential travel market without committing large capital, he said.
Samhi has traditionally focused on acquiring and developing business hotels in key urban markets. Jakhanwala said the investment in Rare India allows the company to participate in the leisure segment while continuing to prioritise its existing strategy of owning and operating business hotels.
“We will remain focused on business hotels when it comes to asset investments. This is a long-term strategic bet that is asset-light in nature,” he said.
Rare India, founded in 2003, operates a curated platform of more than 60 experience-led boutique hotels with around 990 rooms across 15 states in India as well as Bhutan and Nepal.
Jakhanwala said the platform offers strong growth potential as domestic leisure travel expands alongside rising discretionary income and changing consumer preferences.
“We have largely stayed away from leisure hospitality in the past. But with increasing disposable income and discretionary spending, the segment could become very large. This investment gives us an entry into that opportunity,” he said.
A key element of the strategy involves leveraging Rare’s planned integration with the global distribution network of Marriott Bonvoy.
Samhi plans to invest in building Rare’s technology platform and booking infrastructure so that its properties can connect both to the Rare platform and to Marriott’s global booking system.
“Our investment is aimed at enabling Rare to build its technology platform so that individual properties can link to marriott.com as well as to Rare India,” Jakhanwala said.
Rare will also have exclusive rights to represent Marriott Bonvoy’s experiential travel platform, Outdoor Collection, across India, Nepal, Bhutan and Sri Lanka.
According to Jakhanwala, the affiliation provides a unique opportunity to build a branded platform for boutique experiential hotels while leveraging Marriott’s global distribution capabilities.
Rare currently operates with around 67 affiliated properties and has an active pipeline of roughly 25 additional hotels. Jakhanwala said the platform has clear visibility to scale up to about 100 properties in the near term.
“With the opportunity available, 120 to 150 properties should be seen as a near-term target rather than a long-term aspiration,” he said.
Samhi also expects the investment to generate returns relatively quickly once the technology platform is integrated and consumer bookings begin to grow.
“In the past we acquired assets at yields of 2–4%, but today those assets are generating 20–30% yields. Our model is to invest in under-recognised opportunities and build value over time. The investment we are making can potentially be recovered within an 18–24 months period once the platform is fully operational,” Jakhanwala said.