Mumbai-based hospitality firm, the Suba Group, which operates in the mid-tier segment, has acquired a controlling stake in the leisure budget hospitality chain, 1589 Hotels. The development highlights the consolidation taking place in the budget segment where Suba has acquired 35 hotel properties across 1589 Hotels sub-brands GenX, RNB, and RNB Select. The acquired properties will become a part of Suba’s budget hotel brand Click Hotels.
Suba did not disclose the deal size of the acquisition.
Owned and run by Clarks Group of Hotels, 1589 Hotels was set up as a separate division under which hotel and resort properties were being run on a management contract basis. The hospitality chain has a dominant presence in destinations such as Lucknow, Haldwani, Varanasi, Bhavnagar, Dalhousie, Ranthambore and Jim Corbett, among others.
“We always had a strong presence in the business hotel segment and this acquisition will help us capture the leisure market which is expected to bounce back strongly after the pandemic. 1589 Hotels portfolio has a strong presence in leisure and wedding destinations which will open new avenues of growth for Suba,” said Mansur Mehta, managing director of Suba Group of Hotels.
The covid SOP followed by the Group will be implemented across all of the new hotels in a span of 12 months. The existing properties will also convert to Click Hotels during this period.
The family-run hospitality chain, which has a dominant presence across Western India, will also benefit from 1589 Hotels reach in the North market. The acquisition takes Suba’s portfolio across 22 destinations in India with a total of 2,000 rooms.
“We are looking to acquire small hospitality chains across South and East markets as well which will truly make us a pan-India hospitality chain. Our target is to reach 3, 000 rooms by 2023,” Mehta added.
Following its acquisition, Click Hotels by Suba has also marked its transition to an asset-light business model. The hospitality conglomerate has further forayed into the leisure segment building on its ‘Bed, Breakfast, and Broadband’ and affordable luxury model. The new-age mid-segment hotel chain will directly manage 50 prime hotel properties across India, UAE, and Nepal.
Suba will also introduce tech initiatives such as iPads and BYOD (bring your own device) technologies for easy check-ins, online booking system which comes equipped with artificial intelligence to the newly acquired properties.
Suba Group of Hotels diversified into two brands, namely Suba Hotels (three and four-star hotel chain) and Click Hotels (a new-age budget hotel), in 2015. Together, the brands have a presence in India and UAE, with 15 hotels and 720 rooms across 11 destinations.
Nandivardhan Jain, CEO of NOESIS Capital Advisors who acted as an exclusive transaction advisor said “The opportunity to acquire 1589 Hotels attracted the Suba group of Hotels due to their presence in the leisure destination. This transaction is aimed at creating a sustainable and conversion-friendly hotel management platform which aims at suiting to independent hotel owners and domestic travellers requirements.”
