ITC is ramping up its hospitality business with new hotels in Chennai and Kolkata. The tobacco-to-snacks major would build a 1.2 million sq ft hotel in Kolkata at an estimated investment of Rs 860 crore and has already started work on the 600-room property ‘Grand Chola’ in Chennai.
Besides, ITC has bought land for building hotels in Ahmedabad and Hyderabad and would construct another just outside Delhi, its chairman Y C Deveshwar said on the sidelines of the company’s e-choupal launch at Sivaganga.
“We invested Rs 4,000 crore in our hotels business in the last two years. We would invest more (than Rs 4000 crore) this year and next year,” he said. The company is investing not just in hotels but in several other assets and is open to joint investments in the space, he stated. ITC, which has a tie-up with Starwood Hotels & Resorts, would run the operations in several of the new hotels.
The Chennai hotel, coming on the ‘Campa Cola’ property in Guindy with an estimated investment of Rs 1,200 crore, is expected to be completed by 2010.
ITC’s second hotel in Bangalore would be ready in 2009. Though, the company had bought land for building a deluxe hotel in Hyderabad, it would require clearance from the Supreme Court, Deveshwar said.
One Comment
With real estate stocks being hit adversely by the market slowdown, the phenomenon is expected to have a spiralling effect on hospitality development in India. Most real estate majors with a series of hospitality developments in their portfolio are affected by this trend. This may lead to a stall or delay in the completion of projects as well as a revision of the project expenditure. Over the past few months, real estate stocks have seen a major downfall, with an average of 60 to 65 per cent drop in the share prices during 2007-‘08. “There is not only a slowdown in the market, but also an alteration in project costs with the configuration of interest rates,” says Prem Subramaniam, Head, Infrastructure Development Finance Company (IDFC). While financial market analysts expect the decline in real estate stocks to continue in coming months, they also speculate that hotel projects will be stalled due to lack of liquidity and equity funding in the markets. On the contrary, hospitality consultants feel that projects that are already secured with funds will not be affected.For more view- realtydigest.blogspot.com