It would be a new scenario for Hotel Leela, wherein a minority stake will be held in the project for a management contract, Mr Leitgeb explained. Incidentally, Hotel Leelaventure, located in Mumbai, Bangalore and Goa has so far focussed on ownership of the hotel.
The company is also shortlisted by a consortium lead by financial institutions for a hotel project in New Delhi. The talks are in an advanced stage but Mr Leitgeb declined to give details of the same.
Meanwhile, the company has planned an investment of renovating its Mumbai and Goa property with an investment of Rs 25 crore and Rs 10 crore respectively. The investment would be spread over three phases over the next two years and the payback period would be around five years,, he said.
The Mumbai property has 430 rooms of which 130 room are under renovation as part of the first phase. Though the occupany is around 80 per cent, the average room rates are dismal at Rs 5,500, despite a 15-18 per cent increase since October 2003.
The Mumbai room rates have been under pressure for quite some with mushrooming of hotels in North Mumbai close to the airport. However, the Bangalore property has been extremely remunerative with average room rates at Rs 12,500-13,000 at 88 per cent occupancy, Mr Leitgeb said. The average room rates at the Goa property are at Rs 6,300 at 65 per cent occupancy, he added. The average room rates are roughly at a 30 per cent discount to the rack rates.