EIH to focus on managing properties

Overseas projects, which are at different stages of implementation, will mostly be managed an not owned

EIH, which owns and manages the Oberoi and Trident hotels, will increasingly focus on managing properties rather than owning them.

"At the moment, 80% of the properties are owned by us," said EIH Executive Chairman P R S Oberoi. But in future, the ratio could change dramatically. The management contracts could be in the realm of 90%, he said, while addressing a press conference.

The overseas projects, which are at different stages of implementation, will mostly be managed. "Only in the Marrakech property, we have around 30% equity," he said. The hotel is scheduled to open in the next April.

The Oberoi Al Zorah in the United Arab Emirates is also under construction and is expected to be functional in the second quarter of 2016. An agreement has been signed to build a luxury Oberoi hotel on a sea front site in Casablanca, while design and planning of The Oberoi, Doha, has been initiated.

Meanwhile, the Navi Mumbai project, meant to be a mix of hotel and serviced apartments, is stalled due to want of clearances. The land is owned by the Reliance group, which was brought in as a strategic investor in 2010 and holds around 18% in EIH. "We will start construction once the environmental clearances are in place. In India, environmental clearances take time," said EIH's Managing Director and Chief Executive Officer Vikram Oberoi.

EIH is also in the process of consolidating its corporate office in Gurgaon. The idea is to have all corporate offices in one location. "Delhi and Kolkata used to house corporate offices, at the moment it has moved to Delhi. Once the Gurgaon office is complete, it would move there," said EIH's Executive Vice-Chairman S S Mukherji.

EIH is expecting a better performance this year. In the first quarter of the current financial year, revenues of EIH increased to Rs 309 crore, an increase of six%. Profit after tax was at Rs 19.86 crore, an increase of 210%. It, however, includes an extraordinary income of Rs 10.99 crore, on account of sale of land in Darjeeling.

"Even if you exclude the extraordinary income, profits would be higher by 38%," Mukherji told shareholders.