``We are currently talking to two hotels in Guwahati for our expansion in this part of the country,'' Indian Hotels Company Ltd (IHC) managing director RK Krishna Kumar told PTI.

As the gateway to the seven northeastern States, Guwahati holds immense potential for both business and leisure segments of hospitality industry, Krishna Kumar said.

``Negotiations for the two properties are currently under way to thrash out the pricing and valuation,'' he said.

The Taj Group was also interested in greenfield projects and was keeping an eye on potential opportunities in the region.

In the initial phase, emphasis would be on business hotels with the Taj Group venturing into leisure hotels at a later date, he said.

``There are a lot of businessmencoming to this region who invariably stop in this city. It is the business centre for the entire region and acts as a hub for air and rail links,'' Krishna Kumar added.

Krishna Kumar admitted that current restrictions on tourist movement in certain areas of the northeast was a constraint to leisure hotels taking off.

``However, in the long-term, we expect the northeast to open up further and therefore we are readying ourselves for the increase in tourist traffic here,'' he said.

Taj has been on a expansion phase in the domestic market and has been gradually shifting focus to the `B' cities after entrenching itself in the metros.

``We are opening the Taj Exotica in Goa in the last quarter of 1999 which will cater to both the business as well as the leisure segment of the market,'' he said.

The company will also be commissioning one more hotel each in Jodhpur and Pune around October as it expects the market to look up in the second half of the current fiscal.