ECO HOTELS AT A GLANCE

Eco Hotels, the world’s first carbon neutral hotel brand of its kind, has developed a 3 star offering with TheEco™ and a 2 star offering called Ecolodge™ for roll out in BRICS and N11 economies.

CONCEPT

World’s first carbon neutral brand of its kind.

MARKET

India followed by BRICS and N11 economies.

POSITIONING

3 star premium & 2 star value hotel brands.

BUSINESS PLAN

Hybrid asset light model validated by Knight Frank India.

ROLL OUT PLAN

7,200 keys by 5 years – 15,200 keys by 2030.

FUND RAISE

£5 million to increase inventory to 400 keys, establish central HQ, launch franchise.

CONDUCTING BUSINESS RESPONSIBLY

To ensure that the Eco Hotel concept holds promise not just on paper, but earns the targeted profits too, we carried a set of methodical exercises…

Full attention is given to the following crucial points:

  • Careful fine-tuning of the position, service and value proposition of the brand.
  • Detailed research to validate whether the idea has a strong market.
  • Commercial analysis of brand and market fit.
  • A detailed set of non-negotiable standards that govern the brand.
  • Manuals detailing staff training, property design
  • Ecolodge brand prototype operating in Kochi, Kerala since June 2012

EBOT FRANCHISE PROGRAMME

Eco Hotels has developed a proprietary franchise model called EBOT. This model offers a turn key, asset and hotel management solution that will efficiently create optimised hotel properties for an investor. A fee is charged for the Enterprise and Build phases of the programme.

ENTERPRISE

COMPANY FORMATION: A company is incorporated which is fully owned by the investor. Bank accounts are opened and the investment is placed in the Company account. The investor operates the Company on instructions from Eco Hotels, which carries out the ongoing statutory compliance on behalf of the investor.

LAND: Eco Hotels will source land that fits the location criteria for the hotel (based on independent third-party report), carry out due diligence on title, negotiate the price and carry out acquisition on behalf of the investment company.

PROJECT REPORT: Eco Hotels will engage a reputed IPC such as CBRE, HVS, Knight Frank etc to prepare a detailed report which will validate the location, viability (no of rooms, average room rate and occupancy rate) and market size of the proposed hotel.

FINANCE: Optimum structuring of finance is critical to the viability of hotels in India. Overseas investors are recommended to gear their equity outside India as cost of borrowing is high within India. Investors are recommended to gear on a 1:1 debt equity ratio over a longer term of ten years. Eco Hotels will secure the debt finance in India based on its existing relations with Indian banks.

BUILD

DESIGN: Eco Hotels has specifications for all parts of the hotel which forms the master design template. Depending on the size of the land, local planning guidelines and the number of rooms that are to be built, the master design template is adjusted for planning permission.

PLANNING PERMISSION: A local architect will be engaged by the in-house team to secure planning permission from local authorities.

CONSTRUCTION: The Project Management role will be played by the in-house development team. The investor’s company will enter into a tri-partite construction contract with a modular buildings contractor and Eco Hotels. This contract will include detailed costing as well as a fixed time and cost guarantee for the completion of the construction provided by the modular contractor.

OPERATE

Once the building construction is completed, the investor’s company will hand over the property to Eco Hotels to operate either on a hybrid lease with a minimum return for the equity invested or a percentage of the total revenue, whichever is higher.

TRADE

Eco Hotels is obliged to maintain the asset on a full repair and insurance basis. In consideration for this, Eco Hotels will get a carried interest of 20% of gain in capital growth of the asset when it is sold by the investor. The hurdle rate is set at 10% per annum before the carried interest is calculated.

If you would like more information please get in touch via our contact page.

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