Royal Palms Estates has firmed up plans to set up 2000 hotel rooms in the four & five star category in Mumbai, Hyderabad, and Chennai.
The company is targeting mainly the business traveler, corporates and airlines. The company plans to have about a 1,000 rooms in Mumbai alone. Almost 500 of these rooms shall be ready by December 2006.
The company has lined up investments to the tune of Rs 1,000 crore (Rs 10 billion) over the next 4 years. The company is also contemplating setting up 4 or 5 star hotels in SE Asia and has undertaken a survey of the Hotels sector in Singapore and Malaysia.
Its first five star hotel at Goregaon in Mumbai has been operating at an occupancy of 60-75 per cent since its launch in September. The hotel has been able to attract business travelers, corporates and airlines by virute of its proximity to the domestic and international airports.
The company expects to garner a revenue of Rs 40 crore (Rs 400 million) in the first year itself and recover its investment in less than four years. The higher occupancy is due to its relatively low pricing and the offering of additional facilities like golf course, clubs, spas, etc.
Dilawar Nensey, Jt Managing Director, Royal Palms said: "We are expecting our 5 star hotel to return our investment within 4 years. Our expansion in the hospitality sector comes from our belief that for the next decade or so, this sector shall continue to flourish and return higher than expected revenues."
The company has identified the hospitality sector as a thrust area as there is expected to be a dearth of 4/5 stars hotel rooms of almost 15,000 in India by the end of 2006. This gap between demand and supply is expected to go up until 2014.
According to World Travel & Tourism Council (WTTC), the travel and tourism sector in India is likely to generate $90 billion in revenues and close to 28 million jobs by 2014.
Work is proceeding fast on two luxury hotels at Mumbai entailing an investment of Rs 175 crore (Rs 1.75 billion). The first of the block will be a five star hotel of 60 super-luxurious villas each with a swimming pool attached at an estimated cost of Rs 75 crore (Rs 750 million) which is to be commissioned by August 2006 which will immediately be followed by another Five star, 237 rooms deluxe hotel at an estimated cost of Rs 145 crore (Rs 1.45 billion) -- both at Goregaon (Mumbai).
