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Hospitality major EIH Ltd is looking to enter into China and southeast asian countries such as Thailand. After the 64th annual general meeting of the company here, S S Mukherji, vice chairman and chief executive officer, said that the company was in 'active stage' of discussion to manage a property in Thailand.
"We are looking at China and Thailand market and talks are on. Thailand has been through some rough times and that had some impact over the plans but the planned properties in China and Thailand would only be managed by EIH," PRS Oberoi, chairman at EIH told reporters during the press conference.
The hospitality major has been vocal about its intent to walk on a path of asset light strategy specially since last couple of years. Oberoi said during that the company had opened a property in Dubai in June 2013 and construction of an luxury beach resort in Ajman, UAE, The Oberoi Marrakech are underway.
On domestic front, the firm plans to invest about Rs 1,000 crore for the two properties in Bangalore and Goa. Both the properties are waiting for environmental clearances. "Bangalore property is a larger project with 250 keys and about 65 apartments while Goa is 80 room property with over 10 villas. Construction should start next year during this time," added Mukherji. According to company management, the Bangalore property could take four years to complete once construction begins while the Goa project could be finished in two years.
The Navi Mumbai property's construction is expected to start after the monsoon. It will be built on the land owned by Reliance and EIH would manage the property. Reliance Industries chairman Mukesh Ambani's' wife Nita Ambani is also on the board of EIH. Mukesh Ambani-led Reliance Industries Investment and Holding Pvt Ltd and ITC hold 18.53% and 14.98%, respectively. In 2010, Ambani was brought in as a white knight in EIH by EIH chairman P R S Oberoi, to ward off any threat from ITC. Nita Ambani, however, was not present at today's AGM here.
Sounding upbeat about the outlook of hospitality sector, Oberoi said things are looking better now and an uptick in average room rates and occupancy could arrive during the third quarter. For EIH, the ARR during the first quarter in FY15 was Rs 8,373 compared to Rs 7,723 a year ago while occupancy stood almost flat at 61.35% in the first quarter against 61.63% a year ago.
"The second quarter is traditionally the worst for the industry but we are hopeful that things could improve from October onwards," Oberoi said by adding that the new government's serious focus towards travel and tourism sector is one of the main cause of optimism for the hotel company.
Mukherji said ARR and occupancy would most likely stay flat in the second quarter of current fiscal.
