Dasapalla Group's Hyd hotel venture may be delayed

Bureaucratic hurdles may delay the work on Vizag-based Daspalla Group's Hyderabad venture by a few more months. The group currently operates three hotels with a total 226-room strength, and two restaurants at Viskahapatnam and Kakinada.

About two years back, the Andhra Pradesh Tourism Development Corporation had allotted about one acre of land to Daspalla Group to set up a 110-room three-star hotel in Hyderabad at an investment of Rs 20 crore.

While the directors of the group are investing about Rs 5 crore, they have approached financial institutions for the remaining capital.

"We are ready with funds to start the construction anytime, but we have been waiting for permission from government departments for the last one year. Once we get clearance, we will start the work immediately," M Raghavendra Rao, managing director of Daspalla Group, told Business Standard.

Apart from clearing about Rs 2 crore debts, the group earned a net profit of about Rs 2.10 crore and achieved a turnover of about Rs 21.10 crore in 2005-06 as compared to Rs 18.60 crore in the previous year.

"Despite loss of business for two-three months in the wake of tsunami and cancellation of flight services for several days due to the inundation of Vizag airport, we achieved a turnover of Rs 11 crore from Vizag Daspalla Hotel in 2005-06 as compared to Rs 10 crore in the preceding year," Raghavendra Rao said.

At the same time, the occupancy rate in Jaya Residency of Kakinada increased significantly because of industrial growth in the area, he said.

"During the last fiscal, we invested about Rs 1 crore to provide five-star hotel facilities in 24 rooms of Daspalla Hotel, and in the current year we are going to spend Rs 35-40 lakh to upgrade 10 rooms," he said.