Vizag set to get one more five-star hotel

Visakhapatnam will soon have one more five-star hotel. The proposed 130-room five-star hotel, to be set up at an investment of around Rs 60 crore, is expected to be ready by June 2008. The city currently has three five-star hotels with around 256 rooms.

Local contractors and owners of Sangam-Sarath twin theatres are foraying into the hospitality business, and have floated Vishnupriya Hotels and Resorts Private Limited for the setting up of this five-star hotel.

Speaking to Business Standard, K Mahendra Reddy, director of Vishnupriya Hotels, said that the proposed five-star hotel would involve an investment of Rs 60 crore (including land cost) of which the projected construction cost would be around Rs 40 crore.

While Vishnupriya Hotels will pump in Rs 12 crore as equity, the remaining funds will be raised through debts.

"We have already initiated negotiations with Andhra Bank and State Bank of India for loans," Reddy said. According to him, the company owns more than two acres worth Rs 20 crore in the heart of the city, where it plans to construct the hotel.

Vishnupriya Hotels sees great potential for hospitality business in Vizag as it is fast becoming an industrial and IT hub, and a tremendous growth of tourism industry.

Above all, the airport expansion work, which is nearing completion, is expected to make Visakhapatnam a most sought-after destination for both leisure travellers and business and IT professionals, it feels.

The company has decided to take the assistance of nationally and internationally reputed hotels to run the proposed hotel as it does not have prior experience in managing a five-star hotel.

"Fortune Hotels, a division of ITC Hotels, Hyatt Regency, Mariott Hotels and Shangai Hotels have come forward to help us," Reddy said, adding that their franchise would run the hotel for a period of five years and impart training to local staff.

"We will select one of the best firm as our franchise very shortly," he said.