DLF to spend $5 billion to build hotels in India

Mar 28 | Updated: Mar 30 2008, 04:30am hrs
DLF Ltd, Indias biggest developer, will spend $5 billion in the next seven years to build about 125 hotels in the worlds fastest-growing tourist destination.

DLF plans to build 25,000 rooms including 4,000 in the first three years, Rajiv Singh, vice chairman of DLF, said in an interview yesterday in the capital New Delhi.

Spending and investment on travel and tourism will rise 9.4% annually in the next decade, according to the World Travel and Tourism Council. India needs 100,000 rooms and 10,000 to 15,000 are being developed each year, UK-based Hogg Robinson Group Plc said in February.

There is tremendous opportunity because there is a very large shortage today, Singh said.

DLF has a joint venture with Hilton Hotels Corp, the second-largest US lodging company, to develop 75 properties. DLF purchased Aman Resorts Group in November, giving it control of more than 22 properties in 12 countries. Aman Resorts will open a hotel in New Delhi this year.

The developer in August entered into an agreement with Four Seasons Hotels Inc to operate a luxury property in Gurgaon, a suburb south of New Delhi.

The number of five-star luxury rooms will increase to 58,000 in Indias 12 biggest cities in five years from 27,500, Crisil Ltds research division estimates. The average occupancy will drop to 64% from 75%, it said.

Room tariffs at luxury hotels will rise to Rs 11,700 a night by the year ending March 31, 2012, from Rs 3,960 in the year ended March 31, 2003, Crisil said.

Building hotels also raises the value of real-estate developments.

It seeks to enhance the value of our other asset classes, Singh said. We find that a hotel in an office park or luxury housing around it actually makes that product work better.

Bloomberg