Indian Hotels to buy New York property

Indian Hotels is set to acquire a hotel in New York, vice-chairman R K Krishna Kumar said late on Wednesday.

"While I cannot name the hotel because the acquisition formalities are not yet to be completed, all I can say is that it belongs to the Four Seasons group," Kumar said.

Kumar was in the city to hand over a cheque of Rs 7.5 core to the Hyderabad-based Indo-American Cancer Institute & Research Centre on behalf of the Jamsetji Tata Trust, of which he is a trustee.

Kumar said the Taj group of hotels, owned by Indian Hotels, was focusing on expanding its global footprint, having set up hotels in Seychelles, Mauritius, and other countries. The company has also entered the budget hotels category, indiOne.

While it costs between Rs 50 lakh and Rs 60 lakh to build a three-star hotel room, and between Rs 80 lakh and Rs 1 crore to build a five-star hotel room in India, at indiOne, we plan to construct a hotel room at Rs 7 lakh, Kumar said.

The money from the Jamsetji Tata Trust, set up in 1974 and named after the late Tata group chairman JRD Tata, will be utilised for setting up a bone marrow transplant unit, which costs about Rs 2.5 crore.

The Indo-American Cancer Institute and Research Centre will also acquire a linear accelerator at a cost of Rs 3.7 crore. Rs 1.3 crore will be used for acquiring a multi-slice spiral CT lattice network scan and moving laser system, a press release from the Jamsetji Tata Trust said.

G V K Reddy, chairman of TajGVK Resorts and Hotels, which owns three hotels in Hyderabad, donated Rs 18 lakh to the centre.

Our Corporate Bureau adds: Meantime, the Taj Group of hotels, which is run by Indian Hotels, is setting up 10 budget hotels across key destinations in the country.

The 'smart basics hotels', as the company has named this venture, is operated under Roots Corporation, a wholly owned subsidiary of Indian Hotels Company (IHCL).

The new properties, covering seven states will come up in 2005-06. The investment for setting up a hotel is around Rs 10 crore.

Raymond Bickson, managing director of IHCL said, "After the success of our venture in Bangalore, we are now rolling out 10 hotels in the first phase across the country." Launched in June last year, IndiOne Bangalore has achieved an average occupancy of over 85 per cent.

According to Ajoy Mishra, vice-president of marketing, Taj group, "The returns on smart basics hotels are quite attractive considering that operating and capital costs are quite low."

The revenue mix for the Taj group could see a shift with budget hotels expected to contribute significantly in the long term.