Mandeep S. Lamba

HVS ANAROCK was looking forward to wrap up a remarkable start last year in its 2.0 avatar when COVID-19 struck. While this did dilute its revenues, the impact wasn’t significant. It however, compelled the company to revise its growth plans for the next year, throwing a spanner in its aggressive 60% growth in revenue, and halting team expansion plans.

The pandemic was a double whammy for HVS as its business thrives on human interaction and travelling. “However, the status quo evaporated quickly and we had to think of new ways to conduct
our business and interact with our stakeholders,” Mandeep S. Lamba, President (South Asia), HVS ANAROCK recalled. The organisation went virtual quickly, using tech to build and nurture relationships with clients by providing them strategic insights on how to manage the crisis and evolve with the changing environment.

DEBT MANAGEMENT
HVS reviewed its offerings last year to explore if it could tweak or add relevant services during the pandemic. Realising that debt servicing would become a massive challenge in the sector, it worked closely with ANAROCK Capital Markets’ team to collate data on the quantum of debt and key borrowers.

“As per our research, India’s organised hospitality sector alone is dealing with a collective outstanding debt exceeding INR 500 billion,” Lamba opined. “Valuation assignments is a significant part of our services portfolio. But, we realised that the demand for debt servicing would become a key service during the pandemic.”

While most hotel companies adopted a wait-and-watch policy with respect to their expansion plans last year, they are reconsidering it now, especially in leisure destinations and tier 3 and 4 markets. Since feasibility studies are critical in helping determine a project’s viability, they are relying on HVS’ expertise in this domain.

At a time when few spoke about hospitality investments, HVS’ Consulting & Valuation vertical pivoted to secure multiple feasibility study assignments. Moreover, when no significant hotel transactions occurred across India, the team turned to selling luxury villas, after learning that the luxury residential industry was buoyant.

GEARING FOR THE FUTURE
HVS believes there will be a strong demand for valuations on account of greater risk assessment by lenders and a likely increase in transactions as several assets and asset owners face financial difficulties. They will also seek methods to exit or reduce debt.

“Since traveller preferences changed dramatically over the last year, we expect to increase our engagements in luxury villa sales and leases for the rapidly emerging homestay and vacation rental businesses,” Lamba pointed out.

He also expected asset management operating reviews to gain traction as hotel owners engage the company to maximise asset value and potential by optimising operational efficiencies to generate higher ROI and lenders look for enhanced risk assessment for the sector. HVS’ Executive Search vertical is successfully diversifying into additional real estate asset classes.

“We are charting out plans to provide strategic advisory services to the restaurant and food delivery sectors as more institutional investments are likely to increase for this domain,” Lamba stated. Additionally, HVS ANAROCK is planning to roll out Hospitality Overview Presentation & Exchange (HOPE) conference platform, which had its inaugural edition in August 2019, soon.