Unitech to invest $ 720 mn in 4 yrs

Unitech Chairman Ramesh Chandra said his real estate company would invest $720 million in four years to build 28 hotels with partners, including Marriott International, the world's biggest operator.

While four hotels are under construction, work on 10 more would begin by the end of the year, Chandra said. Four of these would be operated by Bethesda, the Maryland-based Marriott, he said.

The per capita annual income in India has risen 86 per cent since 2000, spurring Marriott, Starwood Hotels & Resorts Worldwide and InterContinental Hotels Group to build properties. India is likely to become one of the top five destinations for business travelers in a decade from now, according to the London-based World Travel & Tourism Council.

"There is going to be a shortage for at least the next six to seven years,'' said Chandra. "The most difficult part is getting a piece of land. In future, hotels will be build mostly by real estate companies.''

There are 50,000 luxury rooms in the country at tariffs ranging from Rs 5,000 ($124) to Rs 15,000 a day, with an overall room shortage of about 33 per cent, said K D Mehru, an analyst at Khandwala Securities. In Mumbai, room tariffs have risen about 40 per cent in the past 1 1/2 years on higher occupancy and demand, he said.

"In the luxury segment, people don't mind paying any price and there is nothing like a lean season anymore,'' Mehru said. "Hotels make money not just on the rooms but also on food, leasing of facilities for conventions and other services.''

The New-Delhi based Unitech has hotels under construction in Kolkata, Noida and Gurgaon, and executive apartments in Gurgaon, which will be run by Marriott, Chandra said.

The company was working on funding the projects and it would be a mix of its own money and borrowings, Chandra said.