NEW DELHI: Budget hotels chain FabHotels has planned to expand its business to 15 cities and 1000 hotels, by the end of this fiscal year, said Fabhotels Founder and CEO, Vaibhav Aggarwal to PTI.
The company currently has over 400 hotels under its inventory in around 40 cities and plans to expand it to 55.
The locations include Kanpur, Ludhiana, Allahabad, Rajkot, Surat, Aurangabad, Ajmer, Ranchi, Raipur and Jamshedpur, among others, he added.
"We have a very high demand from hotels to partner with us, reinstating the faith in our business model and the shift which the industry is experiencing at present," Aggarwal said.
The company operates on the franchise model which is asset light, he added.
When asked how the company plans to fund its aggressive expansion plans, Aggarwal said: "In the last round we raised USD 25 million, and a majority of it is being spent towards expansion".
As the company follows an asset-light model, so on-boarding new hotels are at a very minimal cost, he added.
"A majority of our spends are towards technology development, skilling and reskilling people in hospitality to ensure quality control and staff training," Aggarwal said.
On being asked about the main drivers of growth in the hospitality sector going forward, he said: "It is a sunrise moment for the hospitality sector. The budget segment (which is 90 per cent of rooms in the hotel industry) is driving the industry forward and will see multiple brands emerge".
More and more hotels will align with these new-age brands and improve customer experience, those who don't will not survive, said Aggarwal.
Founded in 2014, FabHotels has raised USD 25 million in 2017 in a Series B investment round led by Goldman Sachs Investment Partners.