Leela Palaces to invest Rs 2,200 cr by next year

Hospitality player The Leela Palaces, Hotels and Resorts is planning to invest Rs 2,200 crore by the next year as part of the group's plan to add seven new properties across the country by 2012-13.     

The company will spend the amount for its upcoming hotels in Delhi and Chennai which will be ready for inauguration in 2009.     

"We plan seven new properties across India by 2012-13, and as the first phase of it our group would be investing Rs 2,200 crore to complete two new hotels in Delhi and Chennai by the end of 2009," Hotel Leela Venture Vice Chairman and MD Vivek Nair told reporters here.     

He added that besides the properties in Delhi and Chennai, the chain is also going ahead with plans to set up hotels one hotel each in Udaipur, Pune and Hyderabad and resorts in Kovalam and Kolkata by 2012-13.     

"We have managed to secure funds for the Delhi and Chennai properties with a mix of buy-back of 25 per cent of our Foreign Currency Convertible Bonds worth $100 million and euro 60 million," Nair said, adding that the buy-back was decided during the company's board meeting on June 27.     

Leela group's board had also passed the enabling resolution for setting up properties in Agra, Hyderabad and Pune during the same meeting, though actual number of equity has yet to be decided upon, he added.

Leela Group currently operates six properties in Kovalam, Goa, Mumbai, Bangalore, Jaipur and Gurgaon. The company's sixth hotel in Gurgaon was formally inaugurated today.     

"The Gurgaon hotel is the first one which is under the management contract system. It was constructed with an investment of Rs 875 crore and has 332 rooms and 90 service apartments," Nair said.     

The group's six hotels has a total inventory of 1,800 rooms.     

"Once our new properties are in place, the size of the room inventory would go up to around 2,650 rooms," he added.     

Asked about the impact of the economic downturn, Nair said: "The worst hit was our Bangalore hotel where room occupancy fell to 55 per cent and average room rent to Rs 13,000, from the normal rate of Rs 17,500. In our Mumbai hotel, room occupancy is down to 70 per cent, around 15 per cent less than average."     

Nair, however, said the group's leisure segment hotels in Goa and Kovalam have not faced any pressure and occupancy in those hotels are up by 15-20 per cent this year over last year's figure.