Hotel chain Royal Orchid is all set to tap into smaller cities by adding 700 rooms in its new properties by March 2011. The expansion will initially cover Mussorie, Shimoga and Hospet. The company will also build five-star hotels at Hyderabad and Jaipur, with an initial investment of Rs 180 crore and Rs 120 crore, respectively.
The chain operator has invested Rs 500 crore in these projects. Of these, 60% was debt and the remaining came from equity and internal accruals. Keshav Baljee, president and co-promoter, of the BSE-listed Royal Orchid Hotels, said: ?Business is great in all cities, now that the economy is back on track. Shimoga and Hospet in Karnataka are virgin markets, but we expect it to do very good business.?
The Bangalore-based hotel chain, also plans to add another 600-700 rooms in the next 10-12 months. It currently operates a total of 1,200 rooms in 13 hotels in seven cities.
?In Tier-1 cities like Mumbai, Delhi and Chennai, we look to own hotels, while in the Tier-2 and Tier-3 cities, we are exploring managed and leased properties. We are always open to acquiring hotels that adds to our portfolio,? Baljee said. Last month, the hotel chain announced plans to raise Rs 150 crore to repay debts and fund its future expansion.