East India Hotels to add 2700 rooms in five years

KOLKATA: East India Hotels (EIH) Ltd, which runs the Oberoi group of hotels in India and abroad, on Monday said it plans to set up new properties and enter into joint ventures to add 2,700 rooms that will entail an investment of up to Rs 4,500 crore.

EIH would increase the room capacity to 6,800 from 4,100 at present in the next five years, company chairman P R S Oberoi told reporters after the company's 57th annual general meeting here on Monday.

The expansion plans would be executed by setting up new properties and entering into joint ventures with other partners, he said.

"The total investments projected for the expansion would be in the region of Rs 4,300-4,500 crore and EIH's own investment would be around Rs 1,000 crore," he said.

Out of the 2,700 rooms to be added, 1,300 would belong to the Trident category. The company is coming up with three Trident hotels at Bandra-Kurla complex in Mumbai, Bangalore international airport and Cybercity in Hyderabad, where L&T is the joint venture partner, he said.

The Trident category properties would come up at an investment of Rs 800 crore. EIH would resort to borrowings to part fund the expansion plans, Oberoi said.

During the current fiscal, the company is eyeing a revenue growth of 30 per cent to 35 per cent. About the overseas projects, Oberoi said that the company had signed MoUs for two hotels in Abu Dhabi, one in the Sultanate of Oman, one in Sharm el Sheikh in Egypt, one in Marrakech in Morocco and two in Bhutan.

Asked whether the company was keen on setting up a second property in Kolkata, Oberoi said EIH was looking for suitable land in the growth segments in and around the city. The second city hotel would be Trident property and the company was looking for a partner who has land for the project, he said.

Regarding flight kitchen operations, Oberoi said the company has such facilities in Mumbai, Delhi, Chennai and Bangalore and would invest around Rs 70 crore for setting up a unit near Kolkata airport shortly.

Asked to comment on the average room rent (ARR), a key parameter to ascertain a hotel's business, he said it was around Rs 8,000 plus for the Oberoi chain. In the first three months, the company's revenue stood at Rs 234.25 crore, up by 18 per cent. Promoter's stake in EIH is now at 46.3 per cent.