The Hindu Business Line : Leela Group to set up five new hotels

The Leela Group of Hotels will expand its chain of luxury hotels by setting up five new hotels across the country at an estimated investment of Rs 1,200 crore.

These include four new hotels in Udaipur, Chennai, Hyderabad and Pune. The fifth one is a five-star hotel at Gurgao, for which the Leela Group has signed an agreement with Ambience Infrastructure Ltd to manage the hotel.

Capt. C.P. Krishnan Nair, Chairman of the Leela Group, said with the the five new properties, 1,500 rooms would be added, thus increasing its total inventory to over 2,500 rooms by 2010. This includes expansion of its Bangalore hotel by 144 rooms.

All the properties, except for the Leela Goa, will continue to have a tie-up with the European chain, Kempinski Hotels.

Finances for expansion

While about Rs 320 crore is being raised through FCCBs and Rs 220 crore through private equity, the remaining will be raised through internal accruals and long term loans.

While the new palace hotel at Lake Pichchola in Udaipur is expected to be completed by 2007, with about 80 rooms and suites, the Chennai hotel project, which is coming up on a seven-acre land facing the Bay of Bengal, will be commissioned by early 2008. The Hyderabad project, for which a prime location at Banjara Hills has been identified, will have about 300 rooms; it is expected to be commissioned by early 2009.

Net profit up

Leela Hotels has registered a net profit of Rs 100.81 crore for 2005-06, representing a growth of 119 per cent compared to the Rs 46.04 crore registered the previous year. In the last fiscal, the company's revenue was Rs 343.69 crore, representing a growth of 27 per cent compared to the previous fiscal.