Hyderabad: Some 22 years after quitting the Indian market, Hampshire Hotels and Resorts Llc., owned by New York-based hotelier of Indian origin and Democratic Party fund-raiser Sant Singh Chatwal, is making a comeback.
Hampshire has lined up investments of $1.25 billion, or Rs5,000 crore, for its hospitality ventures in India, over four years. It plans to set up 25 hotels—four-and-a-half-star and five-star—in 21 Indian cities by 2011, according to Chatwal, chairman and CEO.
The company owns hotels in the US, Canada, UK and parts of Asia. Chatwal, who was in Hyderabad recently to inaugurate Hampshire’s hotel (100 rooms), spoke to Mint. Edited excerpts:
What took you so long?
We entered the Indian market way back in 1985 by setting up a restaurant in Delhi with an investment of around $1million.
The timing wasn’t right. We could not run the hotel venture in Delhi successfully in the absence of a liquor licence, which I was assured of but didn’t get. As result, we lost our entire investment and had to exit the Indian market.
I was waiting for right opportunity. It took more than two decades to find the right investment environment.
Meanwhile, I made a success in New York with 3,000 rooms in Manhattan alone. I am now the single largest (hotel rooms) property owner in New York city. We are now convinced of the attractive opportunities that the Indian hospitality industry offers. We have been drawing up plans for our Indian ventures for the last two years or so.
What is the strategy this time and what kind of investments are being planned?
We are coming out with our three successful hotel models to India. We have drawn up a plan to set up 25 hotels...in 21 Indian cities over the next four years. Of this, we will have 10 four-and-a-half-star business hotels under the Hampshire Plaza brand.
Right opportunity: Sant Singh Chatwal’s Hampshire Hotels is making a comeback in India after 22 years.
We are planning to have 10 five-star hotels under the Dream Boutique brand and will have four-five high-end five-star deluxe hotels. We have lined up an investment $1.25 billion into our Indian hospitality business.
If required, we will invest additional funds.
Where are these hotels coming up?
We have been in the process of acquiring land required for our hotel projects during the last two years. In the first phase, we have committed around Rs2,000 crore of investments on 10 hotels in six Indian cities. Of this, eight hotels are coming up in south.
Of the 10 hotels in first phase, two each will come up in Bangalore, Chennai, Hyderabad and Kochi, and one each in Noida and Jaipur.
For the other 15 hotels in the second phase, we are in the process of acquiring land in Delhi, Mumbai, Chandigarh, Ludhiana, Mohali, Indore, Bhopal, Raipur, Ahmedabad, Baroda, Surat, Pune, Nashik, Nagpur and Amritsar. We expect to complete the land acquisition and pre development activities by around June-July next year. The plan is to complete all the hotel projects by 2011-end.
How are you going to fund your ambitious hotel projects in India?
Of the Rs5,000 crore, we are investing Rs1,000 crore as our equity contribution and there are about 20 US-based private equity firms that have shown keen interest in pumping in around Rs1,000 crore. We are planning for around Rs3,000 as debt from banks and financial institutions.
Any plans to raise money from public?
No. Not at present. We will wait for few years for the valuations to go up and, then may consider going public.