Royal Orchid Hotels targets 50 hotels in two years

The Bengaluru-based hotel chain currently operates 28 hotels and is looking at management contracts to expand its network

Bengaluru-based Royal Orchid Hotels is planning to expand its network to around 50 hotels in two years.

The group, which operates 28 hotels, is set to add 8-10 hotels in India and abroad in the next one year, according to a senior company executive.

“We own 10 hotels and operate another 18 through management contracts. We are looking at only the management contract option to expand,” said Chander K Baljee, Chairman and Managing Director, Royal Orchid Hotels.

Having a strong presence in the south, the company is looking at expanding its network in the north and west.

The company is in talks with property developers and land owners to take up new hotels under management contract in cities like Amritsar, Dehradun, Gurgaon, Jaipur, Haridwar, Mumbai and New Delhi. It was also exploring options in African countries like Kenya, Baljee said.

"We have recently opened an office in Delhi and appointed a vice-president for sales who will take care of our operations in the north, where we want to expand rapidly. There is a vast scope for operating smaller hotels in these cities and we want to concentrate on them," Baljee said.

In the next two years, Royal Orchid plans to almost double its room strength from the present 2,500. It is aiming at adding around 1,000 rooms each in 2015-16 and 2016-17.

Royal Orchid, which has managed to trim  its debt in excess of Rs 300 crore by selling off its property in Hyderabad, is now concentrating on only management contracts. Its current debt levels were in the range of Rs 39 crore, Baljee said.

He said the company was also in talks with its joint venture partner Amartara to buy out the stalled property at Powai in Mumbai. It had formed a joint venture to develop a hotel on 1.15 acres of land. But the project has stopped mid-way as the partner wanted to pull out.

“Our partner wants to sell the land we own jointly. We are in talks to either buy out the entire land or sell it altogether. We are working out various options,” Baljee said. Royal Orchid has already sunk Rs 35 crore in this project.