Hotel Leelaventure, India's third-biggest hotel company by market value, plans to more than double room capacity in three years as the company bets on an increase in business and leisure travelers to the country.
The luxury hotel chain plans to raise its capacity to 2,580 rooms by 2011 from 1,140 rooms now, Onno Poortier, who was appointed president of Leelaventure in February, said.
Leelaventure, which plans to add six hotels by 2011, is trying to cut its dependence on the Bangalore market, which accounted for about half its operating profit in the year ended March 31. India's technology hub, Bangalore, may see a decline in occupancy and room rates as companies in the US cut costs on travel and hotels amid a credit squeeze. As much as $500 billion has been wiped out in credit-market losses.
Companies in the US account for more than 60 per cent of the sales of Indian software companies, with Europe coming in second with about 30 per cent.
Leelaventure rose as much as 6.3 per cent, its biggest gain in a month, to Rs 32.70. The stock advanced 6 per cent to Rs 32.6 at 12:38 pm in Mumbai trading.
Hotel Leelaventure plans to open hotels in Gurgaon, near New Delhi, in November, Udaipur and Chennai in 2009, New Delhi in 2010 and Hyderabad and Pune in 2011. The company runs hotels and resorts in Bangalore, Mumbai, Goa and Kovalam in the southern state of Kerala.
"There is a need in India for 150,000 rooms,'' Poortier said. "India is rapidly expanding with regard to the information technology industry. Bangalore, as you know, is the Silicon Valley of India and the government is also promoting Hyderabad, Chennai and Pune as information technology destinations.''
India's foreign tourist arrivals in the first seven months of the year rose 11 per cent to 3.15 million from a year earlier, according to the latest data from the tourism ministry.