Leela Venture to invest $500-mn for expansion

Mumbai: Hotel Leela Venture will invest $500 million for development of luxury properties in upcoming markets over the next three-year period.

The expansions would be kick-started with the opening of the Leela Kempinski in Gurgaon in November followed by the Leela Palace Kempinski in Udaipur, Leela Venture Chairman C P Krishnan Nair said.

The Leela Palace, Udaipur, is scheduled to begin operations from January 2009, he said, adding that the Leela Palace, Kempinski Chennai, with an adjoining Business Park is also scheduled to be opened in 2009. The Leela, Kempinski, Pune and Hyderabad would be operational by 2012, he said.

“The Leela Palace, Kempinski New Delhi, is scheduled to be built by 2010 in time for the Commonwealth Games,” Nair said. Investments would also be made to refurbish and upgrade its existing hotels, Nair said. The company also plans to increase its room tariffs by 10 per cent from October, this year owing to the rising food prices.

When asked about the several foreign companies entering the domestic hospitality market, Nair said that the market could get affected negatively as many of these companies “are not from a hospitality background.”

“The hospitality sector is a service sector and if these promoters enter the sector, the focus on service could get relegated to the background as some of them might be interested only in having properties or building properties only to sell them later,” Nair said.

Moreover, they need to study the Indian market and its culture before entering the market,” he added.

The company’s net profit for the year ended March 31, 2008, stood at Rs 150.12-crore as against Rs 126.43-crore in the year-ago period.