Indian Hotels Co to invest Rs 800 ($185 mil) cr in 17 new properties.
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Our Bureau [The Hindu Business Line]
MUMBAI, Aug. 20
INDIAN Hotels Company Ltd (IHCL), which owns the Taj group, plans to invest Rs. 800 crores over next three years to develop facilities at 17 new destinations. This includes IHCL's foray into budget hotels.
IHCL which earlier gave up its proposal for a Rs. 1,000-crore hotel and convention centre at the Bandra-Kurla complex here is now examining a smaller project which converges commercial, convention and hotel facilities on its own land near Sahar international airport, Mr. Ratan Tata, Chairman, said at the company's AGM here on Friday.
According to IHCL's Managing Director, Mr. R.K. Krishnakumar, the revised proposal which is at a preliminary stage, is expected to cost Rs. 200 crores. The 17 new destinations would be developed through a mix of fresh buildings and acquisitions, he added.
In the first four months of current fiscal, IHCL registered a four per cent dip in income to Rs. 178 crores with a three per cent drop in occupancy to 51 per cent. Mr. Tata hoped the fiscal's second half to be better.
The IHCL Deputy Managing Director, Mr. S. Ramakrishna, is scheduled to leave the company and assume charge as Managing Director at Tata Telecom and Tata Teleservices.
IHCL is undertaking a bench-marking exercise to match services with the best in industry. In luxury segment, the chosen benchmarks are the likes of Ritz Carlton and Four Seasons, Mr. Krishnakumar said.
The company paid Rs. 40 crores to buy Blue Diamond hotel in Pune. Blue Diamond and City Inn, Baramathi, will open under Taj management in October.
Taj International (Hong Kong) got $ 100 millions from sale of the Lexington Hotel in New York. Sale of the Executive Plaza, Chicago, will be shortly concluded. Proceeds from the sale would be used to retire debt and ease IHCL's highly leveraged foreign operations.
St. James Court, London, has tied up with the international group, Crown Plaza. It will be part of this group's reservation network, with a new name, `London St. James Crown Plaza.'
IHCL will invest Rs. 80 lakhs to create a comprehensive Website with add-ons for browsers like a view of Taj rooms, public places and available tours alongside facility to book online.
IHCL recently signed the brand equity agreement with Tata Sons.
Asked if IHCL would exit from any of its Indian properties, Mr. Tata, conceding that fresh assets do not earn for a while, said: ``You have to take a long-term view. We have often said that 1, 2 or 5 five years is a short time in a company's life.'
He reiterated IHCL's expansion to South East Asia would be in a ``fairly conservative manner' as there are no great bargains available in potential acquisitions that side.
Regarding IHCL's 10 per cent stake in public sector ITDC chain, Mr. Tata said that ``we continue to have an interest in participating in the proposed disinvestment. It is a strategic investment.'
Similarly strategic is IHCL's investment in Megapod Airlines, to be used for movement of guest traffic. However, on recoverable dues of Rs. 3.61 crores from airlines that ceased functioning, Mr. Tata said, IHCL was contemplating legal action.
Higher disclosure: The Tata group, as part of corporate governance, is planning a higher level of disclosure for all its companies. This should be in place by next year, Mr. Tata said. |
