MDLR to build four hotels for Rs 1,000 cr

NEW DELHI: The severe hotel room shortage is attracting new players to set up hotels. The latest to join bandwagon is Rs 2,000-crore Gurgaon-based MDLR Group which will be opening four luxury hotels with a proposed investment of Rs 1,000 crore (excluding land price) in next three years.

The group which forayed into the aviation sector with MDLR Airlines, operating its first flight on Delhi-Chandigarh sector last month, will also start operations on Ranchi and Kolkata sector. The airline will be positioned as a regional airline serving only vegetarian food.

MDLR, with business interests in real estate and multiplexes will be opening four hotels in Manesar, Gurgaon (near Delhi), Shimla and Jaipur. “The land for two hotel sites in Gurgaon and Manesar was acquired last year from Haryana State Industrial Development Corporation (HSIDC),” Gopal Goyal, chairman, MDLR group told ET.

The 11 acre land on which the Gurgaon hotel will be built today has marketable value of Rs 350 crore almost double of the value that it was bought at, thanks to the escalating land prices. While the Shimla property will start operations in the next three months, for NCR properties they are targeting the 2010 Commonwealth games. Delhi and NCR region are short of 30,000 rooms for Commonwealth games. It is this shortage which most of the hotel developers are trying to cash in on.

As far as the airline business is concerned, MDLR is starting its operations on Delhi-Chandigarh-Ranchi and Kolkata sector on 5th May. In its first phase it has acquired two aircraft from British Aerospace Systems (BAE). It is the first airline in India to operate four engine Avro regional jets on the domestic sector. The investment in the jets will be to the tune of Rs 50 crore (equity funded).

“By the end of next year we will be acquiring 10-12 more aircraft,” said Mr Goyal. The airline will be later expanding operations to Mumbai, Surat, Jaipur and Bhavnagar. “We are also in talks with ATR and Bombardier to acquire 10 aircraft and 10 more will be kept as an option,” said Harsh Vardhan, director, MDLR Airlines.
With the aviation industry facing a crunch of pilots, no wonder the new airline had to recruit expats. All its pilots are expats except for its four trainee pilots. The airline has recruited four expat pilots and is looking at recruiting four more. An expat pilot costs about $10,000 per month.

The airline has been positioned as a regional carrier for premium category competing with Paramount Airways. Its fares will be higher than low cost carriers but 10% lower than that of full service carriers. It will be opting for eight levels of fares with the cheapest being Rs 1,000.