The Hindu Business Line : Appu Hotels plans budget chain

APPU Hotels Ltd, the company that owns Le Royal Meridien here, plans to enter the budget segment and set up three-star hotels in Tamil Nadu and Karnataka, according to Dr Palani G. Periasamy, Chairman, Le Meridien, Chennai.

He told Business Line that the company planned to set up five hotels in Madurai, Tirunelveli, Pondicherry, Kanyakumari and Kancheepuram. Each hotel will have 50 to 75 rooms depending on the size of the town. The tariff would be between Rs 2,000 and Rs 2,500 a day.

The construction of these hotels would start early 2005 and would be completed within two to three years.

Dr Periasamy said that the company was also interested in acquiring a beachfront property on the East Coast Road, which has emerged as a major entertainment stretch with various theme parks and eateries.

The investment into the expansion will be between Rs 50 crore and Rs 75 crore. The cost per hotel is estimated to be in the region of about Rs 25 crore, he said. The company is in the process of talking to landowners and acquiring the land for the hotels, as all the properties would be new ones.

Le Royal Meridien has been operating in the five-star deluxe category for the last three and half years. A majority of the hotel's clientele are corporate and it had an occupancy rate of over 75 per cent since mid 2003, Dr Periasamy said. The hotel is being refurbished on a continuous basis.

Though arrivals have shown an increase of 12 per cent during the last fiscal, Dr Periasamy felt that the tourism industry in the State needed a great push to get it into the big league. The State should pitch aggressively for more business process outsourcing work and for tourist arrivals so that there is more investment into the hospitality sector, he added.

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