In a major strategic diversification, the ports-to-power Adani Group is making a massive entry into the hospitality sector. The conglomerate, led by billionaire Gautam Adani, plans to construct one of the country's largest collections of hotels, leveraging its extensive airport and real estate assets. This ambitious move directly pits the group against established giants like the Tata Group's Taj hotels, ITC Hotels, and the Oberoi chain.
Scale and Strategy of the Hospitality Foray
Jeet Adani, a director at Adani Group, revealed that the plan involves developing upwards of 60 hotels across their airport and real estate businesses. "It's like one of the largest hotel portfolios in the country," he stated. A significant cluster of about 15 hotels is planned for Navi Mumbai alone, highlighting the scale of the initiative.
The group will develop the properties itself but has decided to tie up with international hotel operators for management. This approach allows them to leverage global expertise while retaining ownership. An exception to the development plan is the Sahara Star hotel near Mumbai airport's Terminal 1, which the group has expressed interest in acquiring as part of a broader bid for Sahara Group's 88 assets.
Airport-Centric Development and Revenue Shift
This hospitality expansion is a core component of the Adani Group's larger city-side development strategy around its airports. The plan includes building retail spaces, convention centres, and food & beverage outlets alongside airport terminals. The objective is to reduce reliance on traditional aeronautical revenues, which are projected to plummet to just 10% from nearly 50% today, as these commercial developments take centre stage.
To support this vision, a large convention centre is planned for Mumbai, while Navi Mumbai will get a smaller 25,000-seat arena. This positions Adani to compete with facilities like Reliance Industries' Jio World Convention Centre in Mumbai's Bandra-Kurla Complex.
Portfolio Structure and Competitive Landscape
When asked if the hotel business would be spun off into a separate entity, Jeet Adani clarified that it would remain integrated. Properties linked to real estate will stay with Adani Realty and Adani Properties, while airport-related hotels will remain within the airport business. However, a common management team has been created to extract maximum value across both verticals.
The move sets the stage for intense competition in India's premium hospitality market. The Adani Group will compete with the Tata Group's iconic Taj chain, ITC's hotel division, and the Oberoi chain, where Reliance Industries and ITC hold significant stakes of about 19% and 16%, respectively. The group has also secured creditors' approval to buy Jaypee Group assets, which include five hotels in northern India, further consolidating its position.
