Indian Hotels earmarks Rs2.6 bn for expansion

Indian Hotels earmarks Rs2.6 bn for expansion
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First Published: Thu, May 27 2010. 08 56 AM IST
Updated: Thu, May 27 2010. 08 56 AM IST
Mumbai: Indian Hotels Co Ltd plans to spend around Rs2.6 billion in FY11 on new projects across India, its chief financial officer Anil Goel told reporters on Wednesday.
The owner of the Taj luxury chain plans to open properties in New Delhi, Bangalore, Hyderabad and Guwahati, Goel said.
“We have enough projects under implementation in the next twelve months. The idea is to focus on growth this year...we are seeing visible improvement in the market,” Goel said.
The firm plans to add 1,647 rooms this fiscal, across 13 properties in India and overseas, said Ajoy Misra, senior vice president, sales and marketing.
It had added 822 rooms in the previous year.
The hotel chain, part of the Tata conglomerate, reported a consolidated net loss of Rs1.36 billion in 2009-10 compared with a profit of Rs124.6 million a year ago.
Consolidated profits were hurt “due to the drop in profitability of its hotels in the USA because of the impact that the recession had in that market,” as well as a slowdown in the domestic market, it said in a statement.
India’s hotel and tourism industry is currently recovering from a near two-year economic slowdown made worse by the terror attacks in Mumbai in November 2008, which hit tourism traffic.
The Taj Mahal property of Indian Hotels in southern Mumbai was one of the sites hit by the terror attacks.
Officials said there has been a steady increase in occupancy levels though room rates were not rising as fast.
“The fourth quarter has been encouraging. Occupancy seems to have come back to levels seen in 2007-08. Rates are however lagging a bit,” Misra said.
“The good news is that rates have started rising, above the third quarter and certainly above the first and second quarters”.
The firm has raised Rs7 billion in 2009-10 by issuing low coupon non convertible debentures and used the proceeds to retire some of its foreign currency debt.
Its net debt as of 31 March stood at Rs38 billion.
Indian Hotels shares ended 2.95% lower at Rs98.85 in a firm Mumbai market.
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First Published: Thu, May 27 2010. 08 56 AM IST