EIH to manage hotels, not own them

Trident chain to spearhead expansion drive for the group

Trident Hotels, the co-branded strategic alliance of East India Hotels (EIH) Limited with Hilton International, is set expand in the south Asian region (India, Nepal, Bangladesh, etc.) and is also looking at purely managed Trident hotels in cities like Hyderabad, New Delhi, Kolkata, Pune and Ahmedabad.

Several offers are on the anvil, of which two are likely to materialise this year.

Kolkata will not be featured in the first phase of development, PRS Oberoi, chairman and chief executive of EIH Ltd., said after the company's annual general meeting in the city.

Trident already has an overseas presence in Jeddah in Saudi Arabia.

EIH Ltd is also set for overseas expansion with three properties one each in Thailand, Cambodia and Dubai.

Oberoi made it clear that the company will concentrate on managing properties rather than owning them.

"The company already has too much real estate," he said.

All these properties will be operated on a purely management contract basis and a consultant from eastern Asia has already been engaged for a study of the Cambodian property.

The previous overseas venture of the company in Marrakech was dropped after the blasts in Casablanca.

The company currently has a hotel on the Red Sea coast, and there had been few cancellations of bookings after the recent blasts.

Bookings were expected to stabilise before the peak winter season, Oberoi said. The architect for the new luxury Oberoi hotel in Gurgaon has already been appointed. The property will just be managed by the company and would offer 175 rooms.

The project cost was around Rs 200 crore, Oberoi indicated. A plot of eight acres had already been acquired for the Bangalore hotel and the project would cost Rs 250 crore.

Both these projects will be completed within the next three years. The 440-room Bandra-Kurla hotel would be commissioned by December 2007 if work commenced in schedule in the next few months, said Oberoi.

The project cost was around Rs 600 crore, of which Rs 300 crore had already been invested. The investment required for the Bangalore and Bandra hotels would be raised through internal accruals.

Profitability was expected to increase as the tourism industry was on a rebound, Oberoi remarked. The development arm of the company had spoken to the ministry concerned regarding possible sites in the Andaman and Nicobar Islands (A&NI) for a new hotel but the response had not been encouraging so far, Oberoi pointed out. Oberoi said the presence of a naval base in A&NI appeared to be a hurdle for development of tourism in the islands.

The Oberoi chain had no immediate plans to sell the Darjeeling property as it expected to turn it around, but it needed investvests of around Rs 50 crore.