How well is Royal Orchid prepared to brace for the current liquidity crunch in the realty market?

The present liquidity crunch has slowed down the progress of committed projects. With these projects taking more than their committed time, it would mean less competition for the existing players. It will make our brand even stronger.

Isn't the liquidity crunch affecting your expansion plans?

We are pretty aggressive on our expansion. Our financial needs have been taken care of. In the next two years, the company will develop six new hotels with an investment of around Rs 500 crore (Rs 5 billion). We are also looking at forming joint ventures to set up five-star hotels in a few cities and are also adding a leisure resort to our

Tanzania property, which we bought in 2007 for Rs 80 crore (Rs 800 million).  At present, Royal Orchid operates 11 hotels, -four in Bangalore, two each in Mysore and Pune and one each in Hyderabad, Goa and Jaipur. After the expansion, the total room inventory will go up to 1,750 from 559 now.

Will the new capacity coming up in Bangalore affect your average room rates (ARRs)?

Every single city will be affected with the new inventory in the market. At the moment, ARRs are stable because there is no additional capacity right now in Bangalore and Pune.

Will the current slowdown in travel impact your occupancy levels?

With the current slowdown in the travel market, the occupancy may take a hit in the next quarter. But business travellers will have to travel, no matter what. The leisure travel might slow down. But business travellers will help us shore our business.

Hotels in cities, including Bangalore, have decided to discontinue complimentary services to their clients. What about Royal Orchid?

We were giving these services to our clients earlier and would continue to do so. We understand our customers must be feeling the pinch of the current economic trend and we would want them to enjoy their stay with us as they have always.