Newstrack

Landmark plans Rs 100 cr investment in India

To launch three-star Citymax hotel chain

EH Staff - Mumbai

After establishing its footprints in the Indian retail sector with Lifestyle, Max and Home Centre brands, Dubai-based Landmark Group is eyeing the hospitality pie. It has already instituted a separate company christened Citymax Hotels (India) and expects the first hotel to launch in the next 15 months.

Ravi Saxena, managing director of Citymax Hotels, said at press conference, "The hotel chain will be named Citymax and will be positioned in the three-star category. The room rates will be upwards of Rs 2,000. The hotels will be launched in different phases with about a dozen properties getting operational in phase I. We have already negotiated real estate deals for half-a-dozen projects and the first Citymax hotel will launch towards the latter half of 2008."

Although Saxena didn't disclose details about the location of the first hotel, company sources indicated that it will be in Bangalore's Whitefield area. The room inventory in Citymax hotels will be a minimum of 100 rooms, going up to 200 rooms and more on a case-to-case basis. The company will primarily look at 'mall-o-tels' besides standalone locations for its hotels in the country.

Taking the leasing route for procuring hospitality real-estate, the management will explore greenfield projects through joint venture and even management contracts as a strategy for its hospitality footprint across tier I and tier II cities. While acquisition as a strategy cannot be ruled out completely, the company may consider inorganic growth purely on a need-based situation. Some of the other locations identified by Citymax besides Bangalore include Mumbai, Pune, Baroda, Ahmedabad, Hyderabad, among others. With just over 1,00,000 hotel rooms to offer in the organised category, the country's hospitality sector is caught between a major demand and supply imbalance. Growing consistently at 15 to 20 per cent annually, the estimated short supply of hotel rooms and the projected demand for the coming three to five years is an additional 50,000 rooms, taking the grand total of additional hotel rooms required to 80,000 by 2010.

According to international hospitality consulting firm HVS International, there are over 150 hotel projects under various stages of development. This is expected to increase India's current hotel room supply by 30,000 rooms in the coming three to five years. However, the tourism ministry estimates that over 50,000 hotel rooms will be added in the next four to five years as around 300 hotel projects have been cleared by the ministry in various categories.