Indian Hotels lines up Rs 565 cr for spread

Indian Hotels Company (IHCL) has earmarked a capital expenditure of Rs 565 crore for the current financial year.

Ratan Tata, chairman, said at the company's 104th annual general meeting in Mumbai on Thursday that of the Rs 565 crore, Rs 500 crore has been earmarked for expansion, while the balance would be used for upgradation of existing properties.

Tata added that the company planned to add about 1,100 rooms, including 500 for the budget IndiOne Hotels this financial year. He added that the company's immediate expansion would include Bangalore, Coimbatore and Mumbai.

"We are going to replicate our success with IndiOne in different parts of the country. In the next 2-3 years, Taj will put up 40 IndiOne hotels in various cities and towns in the country," said Tata.

"I can see a large potential for budget hotels in the country, especially in places with very few affordable hotels," said Raymond Bickson, managing director Taj Hotels, who also was present at the AGM "About seven of our IndiOne hotels are under construction and they will be opened in a year or so. The occupants will get good amenities in the hotel, for which an average room rate of Rs 1,000 will be charged," he added.

The company was also contemplating on owning and managing hotels in Andaman and New Delhi.

The company has tied up with South Africa-based CC Africa and Nepal-based Cigen Corporation to develop wildlife across the country. It has inducted Valli Moosa, a former minister of the South African government on the company's board. It is looking at owning and managing hotels in China and Europe.

Its luxury resort in Maldives, which was hit by tsunami is being upgraded and expected to be operational by December.

IHCL registered an average room rate (ARR) of Rs 5,576 for the year-ended March 2005 against Rs 4,511 for the previous year.

Revenue per room increased by 34 per cent, while from food and beverages, it earned 19 per cent more for the year ended March 2005. The current market capitalisation of the company stands at Rs 3,920 crore as against Rs 2,000 crore a year ago.

Besides the Pierre in upmarket New York, IHCL manages Taj Green Cove in Kerala, Taj Exotica in Mauritius, a luxury-resort in Dennis Island, Seychelles, and a resort in Langkawi, Malaysia.