Bharat Hotels Ltd has notc-hed up a gross profit of Rs 33 crore on a turnover of Rs 87 crore for the year 1997-98 from its New Delhi property, which was managed by Hilton International (HI) till March 31, 1998.
Bharat Hotels' chairman and managing director Lalit Suri admitted that its New Delhi property had fallen short of budgeted revenues.
"For 1997-98, gross profit should have been 64 per cent of the targeted turnover of Rs 128 crore," Suri said, adding, "While revenue was falling, expenses were rising hitting Bharat Hotels from both sides."
Meanwhile, the company has decided to acquire and develop five-star properties in Kashmir, Mumbai, Goa and Gulmarg under the brand name of The Grand.
It has earmarked about Rs 300 crore for the new ventures. Its New Delhi property will start sporting the Intercon-tinental brand name from the next fortnight.
The company is bullish on the properties it has acquired and is developing in Mumbai, Goa and Kashmir.
The Kashmir hotel, formerly managed by The Oberoi group, will open this summer initially with 60 rooms and subsequently have another 60 rooms.
"I am confident of clinching a deal for a hotel in Gulmarg, Highland Hotels, which, too, will be made operational this year if everything goes well," Suri said. The Mumbai property is likely to be commissioned by the turn of the century.
Bharat Hotels severed its management ties with Hilton International in two years
(the termination came on March 31, 1998) after having signed a 25-year contract in 1995. Now, Bharat Hotels has opted for a franchisee contract.
Under the management agreement between Hilton and Bharat Hotels which was signed in 1995, the latter was to retain 40 per cent of annual gross operating profits in each of the Hilton properties. Suri termed the divorce as 'amicable'.
Since April 1997, Bharat Hotels has been questioning Hilton's failure to meet the annual budgeted operating profit figures for the Delhi property and had made it clear to its foreign partner that the existing contract is too expensive and is not yielding economic returns for the Suris to justify its continuation.
Meanwhile, the franchisee contract which Bharat Hotels will be signing with Intercontinental will be for 10 years.
For both Bharat Hotels and Intercontinental, this would be the third partnership. Intercontinental earlier had alliances with the Taj and The Oberoi groups.
Bharat Hotels, which owns the prime property just off the capital's central market, Connaught Place, started off with a franchisee contract with Holiday Inn Crowne Plaza
during the Asian Games of 1982 and in 1995, signed on with Hilton for a management contract.
The UK-based diversified group Bass plc, which owns the Holiday Inn and Crowne Plaza brands, recently bought the Intercontinental group.
