Post-slowdown, both homegrown and international hospitality players are on an expansion spree. Bharat Hotels, which owns and operates nine Lalit hotels in India, is also in a similar mode, looking at doubling its number of properties in the next five years. It clocked a revenue of R405 crore in 2010-11. FE’s Vishakha Talreja spoke to Jyotsna Suri, chairman and managing director of Bharat Hotels, about the group’s expansion plans, its budget brand of hotels, plans for an IPO and tie-up with InterContinental Hotels.
Are you looking at doubling your hotel count?
We will be launching around eight new hotels in the next five years. We will be investing R1,300 crore for Lalit properties that we are developing at different locations such as Kolkata, Jaipur, Ahmedabad, Chandigarh, Amritsar, Dehradun and Noida by 2015. We are also developing our mid-segment brand of hotels ?The Lalit Traveller?. The projected investment in our mid-market hotels will be to the tune of R500 crore and the first Lalit Traveller will open in Pune next year.
How will your budget hotels be different from Taj’s Ginger or for that matter other options that are already available in the market? Will it have frills?
We are calling it mid-segment as the hotels will be in the range of 2-4 star. We are customising them according to the city. For instance, in Amritsar Lalit Traveller will be a four-star whereas in Mundra it will be a two-star. We are not branding it in one particular segment. Also we are different because we are building what suits a city and not following the copy-paste formula for our budget hotels. For instance, in Amritsar you will get frills, in Mundra you won’t. But in Mundra there will be a swimming pool and a tennis court, as there is no other means of recreation in that city. In Mani Nagar, Ahmedabad, there won’t be a pool, but it will have a beauty parlour since it is situated in a residential area.
Are there any plans for an IPO?
We are funding our projects through internal accruals and loans. Why go for an IPO if you don’t need the money? Plus the market is very bad as of now, so before 2012 we are not even looking at going public.
Are you taking The Lalit hotels out of country, too?
Yes, we are developing a hotel in Koh Samui in Thailand. We had a project in Dubai, where our JV partner was Nakheel. But the project is defunct now since Nakheel is bankrupt. Our money is stuck in the project. We haven’t filed a suit yet, but we have filed a petition. We might look at arbitration since we have not been able to do an out-of-court settlement. It was a R600-crore project.
You still have a tie-up with InterContinental for your hotels?
Our marketing franchise with the InterContinental Group in Delhi concluded in 2008 and that’s when we decided to re-brand the property as ‘The Lalit’ and not continue with the tie-up. The contract for our Mumbai and Goa property will expire in about 12-15 months. We won’t renew the contract after that. It doesn’t make sense to pay so much of money for a marketing tie-up.
Most of the homegrown companies are taking the management contract route to grow. Are you also looking at being asset light?
We own, manage and develop our own inventory. And at this point of time this is how I would like it to be. If I will take up management contracts, I will dilute myself further. A management contract is a completely different ball game. We are a very dynamic group, so I am not saying I will never change.