Bangalore hospitality firm to invest Rs 520 cr for expansion
MUMBAI: Bangalore-based Royal Orchid Hotels is going aggressive on expansion. In the next two years, the company will develop six new hotels with an investment of Rs 520 crore.
Royal Orchid will form joint ventures to set up five-star hotels in Ahmedabad, Mumbai, Hyderabad and Jaipur by end-2010. It is also looking at the leisure and business hotels segments in Goa and Pune.
The company’s chairman and managing director Chender Baljee said Royal Orchid hopes to expand its total properties to 16 by 2010. “We are also adding a leisure resort to our Tanzania property,” he added.
In 2007, the company bought the beachfront property in Dar es Salaam in Tanzania for Rs 80 crore. It will spend another Rs 52 crore to develop a leisure resort and five-star hotel by December 2010.
To cut down on land acquisition and development costs, Royal Orchid will get into joint ventures for its five-star properties and sign lease and management contracts for the four-star ones.
At present, Royal Orchid operates 11 hotels-four in Bangalore, two each in Mysore and Pune and one each in Hyderabad, Goa and Jaipur. After the expansion is complete, the total room inventory would go up to 1,750 from 559 now.
In the budget hotel segment, Royal Orchid owns the Peppermint brand. Peppermint will open another hotel in Hyderabad and decide on its expansion plans thereafter.
Also on the cards for the hospitality company is a hike in the average room rate (ARR) at the Royal Orchid Harsha in Bangalore. This comes at a time when the hotels industry is seeing price softening. “We are doubling the ARR because of the Royal Orchid Harsha’s location. The new airport is close to this hotel and the property has recently undergone renovation,” Baljee said.
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