The company is setting up four luxury hotels in Mumbai itself, out of which one is a three-star, one four star and two five-stars hotels. This will increase the total room capacity to 3,000 by 2010, which will be around 30 per cent of the total rooms available in the city, Royal Palms India Joint Managing Director Dilawar Nensey told Business Standard.

Royal Palms already has two hotels in Mumbai, and three each in Hyderabad and Kolkata. At present, the company has a total of about 400 rooms in Mumbai. "The investment for Mumbai will be one of the highest as it excludes the price required for land. We intend to set up hotels on our own land at Goregaon East," Nensey said. The addition of rooms will cater to the existing shortage of 2,500-3,000 rooms per day in Mumbai, however, with growth in the tourism industry, demand for rooms is expected to increase further.

The company is in the process of identifying properties in Hyderabad and Kolkata for setting up luxury hotels. Royal Palms will invest around Rs 1,400 crore to build three- and five-star hotels in these cities.

The company intends to develop one three-star, one four-star and one five-star hotel each in Hyderabad and Kolkata, with a total room capacity of around 800-1,000.

Royal Palms is looking at a gestation period of 3-4 years for all the properties, as compared with the present industry time of 9-11 years. All the projects will be completed by 2011, and on completion of these projects, the company will look at foraying into other destinations, including Chennai.