Ahmedabad: With tourist inflow rising in Gujarat, hospitality sector players have started showing their interest in setting up new hotels and restaurant.
Juniper Hotels Pvt. Ltd (JHPL), which has a tie up with Chicago-based Hyatt Hotels Corp., is setting up a five star hotel in Ahmedabad under the brand name Hyatt Regency at an investment of Rs 400 crores, while Kamat Hotels (India) Ltd is planning to set up two three star hotels Gujarat with an approximate investment of over Rs 50 crore, officials of the firms said.
“We are setting up a 300 room, five star hotel in Ahmedabad on Ashram Road. We have already acquired two acres of land for this project which will be completed by 2013. The hotel will have The company will invest Rs 400 crore in this project,” Amit Saraf, vice president, JHPL, said on the sidelines of a seminar ‘Gujarat Tourism and Civil Aviation Exploring Investment Opportunities’ jointly held by Gujarat government and the Federation of Indian Chambers of Commerce and Industry (Ficci).
JHPL owns Grand Hyatt in Mumbai.
He said with rising tourist arrivals and commercial activities gaining pace in Gujarat , the demand for good hotels has also gone up.
“We have timely entered the state,” Saraf said.
Vithal V. Kamat, executive chairman and managing director of Kamat Hotels Ltd, said the firm which had pulled out from Gujarat 20 years ago has revived its plans for the state.
“We used to own a hotel in Vapi, (in Valsad district of Gujarat) but we closed it down 20 years ago. However, now with good infrastructure development in the state we have revived our focus on the state,” Kamat said.
The firm is currently scouting land in major towns including Ahmedabad to set up two hotels, he said.
“We will set up a three star hotel with 80 room capacity under the brand name of Orchid while another hotel with same capacity will be set up under the brand name of Vits,” he said.
He added per room investment will be Rs 30 lakh which turns out to be around Rs 50 crore for both the hotels which will come up by 2013.
Kamat said the firm will also set up 10 highway restaurants in the state.
“We are also planning to set up 10 highway restaurants in Gujarat with an investment of Rs 15 crore. This is a very viable business in Gujarat as demand for highway food joints in the state is tremendous,” he said.
Similarly, McDonalds India, which has 24 highway restaurants across including one in Gujarat , is planning to add 30 highway restaurants in the state within the next three years.
“We see a bright opportunity in highway restaurants as most tourists prefer to travel by road in the state. We will be setting up 30 highway restaurants in the state with an estimated investment of Rs 2.5 crore in each restaurant,” said Nishit Pandey, director alliance, corporate affairs and administration, Hard Castle Restaurants Pvt Ltd that manages McDonalds restaurants.
However, viability of more hotels in Ahmedabad is in doubt, said Narendra Somani, president, Gujarat Hotels Association, a body of hotel owners in Gujarat.
“I don’t think that additional capacity will be very viable in Ahmedabad as total capacity in the city is 2,000 room (three and five star hotels) while average occupancy rate is only 60%-70%. In peak seasons, the occupancy rate goes up to 80% and some time 100%,” Somani said.
He said by 2011, another 1,000 room capacity is likely to be added which will not leave any room for the late comers.
“Mariott Courtyard and Gateway Hotel are the only two five star hotels in Ahmedabad and these two hotels also reduce their rates considerably during the off season. If third five star hotel enters then it may create a price war in hotels during off seasons,” he said.
Somani is also the chairman of Bhagwati Banquets and Hotels Ltd which operates hotels in Ahmedabad, Surat and Rajkot under the brand name of The Grand Bhagwati.
He added highway restaurant business is more viable as very few branded food chains are there in Gujarat.
“There are very few big players in highway restaurants in the state which includes Reliance Fresh and Honest. There is more room for highway restaurants in Gujarat than three star-five star hotels,” Somani said.