EIH to spend Rs 1,150 cr in new properties in India & abroad

KOLKATA: EIH has finalised plans to invest over Rs 1,150 crore in about 12 new properties, both within the country and abroad, by the end 2008 and early 2009. The company plans to have an equity investment in at least seven of these properties, while it is looking at management contracts in the other properties.

“We are planning to build new luxury hotels under the ‘Oberoi’ brand in Bangalore, Goa and Gurgaon and in Madhya Pradesh. The brand will also be used for new properties in Siem Reap in Cambodia, the Maldives and a 250-key property in Dubai,” Mr P R S Oberoi, chairman, EIH, told newspersons after the company’s 56th annual general meeting on Friday.

EIH will also set up at least two new properties under its second brand ‘Trident Hilton’. This includes a 250-key hotel in Hyderabad and a 437- key hotel in Mumbai. Out of the total investment plan, about Rs 500 crore will be invested, with the remaining amount is likely to be pumped in by 2009. “EIH is also actively looking at China and we hope to have a presence in that country in the long-term,” Mr Oberoi said.

“For strategic reasons we would also like to be present in London and New York. But there is nothing on the radar at present, he added.

The announcement comes at a time when EIH is riding the boom of a surge in hotel industry’s fortunes. The company’s net profit for Q1 of 2006-07 went up to Rs 24.68 crore, an increase by 45%, over Rs 17 crore posted in the same period of the previous year.

“Average room rates have also gone up by 30% for the April-June ‘06 quarter this year,” Mr Oberoi said.
“At Dubai, we will be managing a $100-m property being developed by Rani International of the Aujan group. EIH is likely to have a minority equity stake of 25% in the project.

At Cambodia, it will pick up an equity stake amounting to roughly around $2m,” S S Mukherjee, managing director, EIH, said. EIH is also getting ready to start a 30- cabin, seven-day luxury cruise on the Nile in Egypt around July next year. “EIH has also acquired five acres of land on Jessore Road, near Kolkata airport to set up an in-flight kitchen, anticipating a rise in air traffic in the eastern region,” Mr Mukherjee added.

EIH has also recently commissioned a market survey on the prospects of launching branded frozen foods. This will be in the nature of ready to eat meals and trying to find out if and where there is a market for it,” Mr Oberoi said.