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Rooms to let? Too late!

October 20, 2004 12:53 IST

Once they are ready, the capital's four ITDC hotel properties that went on the divestment block nearly two years ago, are expected to add nearly 1,000 rooms to Delhi's hotel industry.

But will the projects be ready in time to catch the peak winter tourist traffic next year? Going by their current rate of progress, it is difficult to answer in the affirmative.

Ever since the government sell-off of hotels such as Kanishka, Ashok Yatri Niwas, Lodhi and Qutab in Delhi, only one hotel -- The Qutab -- has started operating under the new private management.

Bought by EdenPark Hotels Ltd, a consortium led by Sushil Gupta, owner of Hyatt Regency in Mumbai, Qutab currently has 60 rooms and 30 service apartments that are operational.

The same cannot be said about the other properties. Ram Parshotam Mittal who bought out the Ashok Yatri Niwas (Hotel Indraprastha) for Rs 45 crore (Rs 450 million), promises to relaunch the property by March 2005. However, the foreign partner for the management contract is yet to be finalised.

Similarly, the renovation of the Kanishka hotel, bought by the Rs 1,500-crore (Rs 15-billion) Eros Group, seems to be hit by delays. Eros outbid buyers like Lalit Suri of Bharat Hotels Ltd and Pawan Munjal of the Hero Honda Group to grab the premium property in the heart of Lutyen's Delhi.

In August 2003, Eros' chairman Jagdish Kumar Sood told Business Standard that the new 324-room hotel will be ready in six months. More than a year later, the project is nowhere near completion. The company has, however, signed a 10-year management lease with the Shangri-La hotel chain, one of the top 10 hospitality brands in the world.

The progress at Lodhi Hotel, sold to Hong Kong's Silver Links Holdings that owns the Amanresorts brand, is equally slow. The old building has been demolished but construction is yet to begin. The hotel was sold for Rs 70 crore (Rs 700 million).

Despite project delays, the new owners are quite upbeat. Satish Sood, the managing director of the Eros Group says that the project has been delayed because the architect-cum-interior designer, Chandu Chhada was replaced by London's LRF Designers International. "We expect to open the hotel by early next year," he says.

The company has paid nearly Rs 101 crore (Rs 1.01 billion) for the three-acre property which came with a 328-room hotel and a three-storied shopping complex. Eros is spending close to Rs 160 crore (Rs 1.6 billion) on renovations.

Sood hopes that when it is open, the new five-star deluxe hotel under the Shangri-La brand name will have a steady flow of business travellers as Shangri-La will market the hotel internationally. The company expects to reach a cash break-even by the second year of operations.

In Shangri-La's neighbourhood, Mittal is busy converting the 558-room Hotel Indraprastha (Ashok Yatri Niwas) into a 4-star 338-room hotel with the options to keep some rooms for service apartments and restaurants.

"A luxury hotel, it will be among the finest in the city," he says. Mittal says that the room size disqualifies it from being a five-star.

Once a rundown stopover for backpack travellers, the new hotel will acquire onyx basins, handcrafted furniture and European linen.

"All our accessories will be imported," says Mittal, who heads a Rs 100-crore (Rs 1-billion) mini steel company in Pondicherry. The project architect is Mumbai-based Talati & Sons.

The Qutab, meanwhile, wants to add 120 guest rooms and tie-up with Choice Hospitality's Clarion brand. A total of Rs 55 crore (Rs 550 million) has been spent on acquiring and renovating the property.

"Qutab will be positioned as a 4-star deluxe hotel. We are targeting 80-85 per cent occupancy," says Sandeep Gupta, MD, EdenPark.

Amanresorts acquired the Lodhi hotel property in January 2003 but the company did not respond to Business Standard's queries on the project.
Maitreyee Handique