The Hindu Business Line : Oberoi Group plans 60% capacity expansion in 5 years

Bullish mood: Mr P.R.S. Oberoi (foreground), Chairman, EIH Ltd; Mr S.S. Mukherjee, Managing Director; and Mr Vikram Oberoi, Joint Managing Director, at the 57th annual general meeting of the company in Kolkata on Monday.

Our Bureau

Kolkata, Aug. 27

EIH Ltd, flagship of the Oberoi Group, which owns or manages 32 hotels and luxury cruisers in five countries under the ‘Oberoi Hotels & Resorts’ and ‘Trident Hilton’ brands, has planned for 60 per cent capacity expansion (both in India and abroad) in the next five years — from the current 4,100 rooms to 6,800.

Talking to newspersons here on Monday after the company’s 57th annual general meeting, Mr P.R.S. Oberoi, Chairman and CEO of the company, said this would entail a total investment between Rs 4,300 crore and Rs 4,500 crore, out of which EIH itself would be investing around Rs 1,000 crore, with the balance coming from other joint venture partners. Seven additional luxury hotels are planned, for which the company has already signed MoUs.

These include two in the Emirates of Abu Dhabi, out of which one will be a resort and another hotel in the Sultanate of Oman; one in Sharm el Sheikh in Egypt; one in Marrakech in Morocco, and one each in Paro and Thimpu (30 rooms each) in Bhutan.

Mr Oberoi said the company was also planning flight kitchens at the international airports in Kolkata (for which land has already been acquired) and Mauritius.

International scene

He said on the international front, EIH has already signed management contracts for The Oberoi hotels in Dubai, Maldives and Angkor Vat (Cambodia).

The group has also signed joint venture agreements for a 350-key Trident Hilton at the new Bangalore International Airport (with L&T), and a 400-key Trident Hilton and 140-key service apartments at Cyber City Hyderabad (with the Rama Rao Group). Mr Oberoi informed that the Trident brand now accounted for 50 per cent of the room capacity commanded by EIH.

According to Mr S.S. Mukherji, Vice-Chairman and Managing Director, out of the 2,700 additional rooms in the next five years, Trident category would account for 1,300, with the remaining in the Oberoi brand.

He clarified that while Rs 500 crore was being spent on the ongoing projects, an additional Rs 500 crore would be spent in the next three-four years. On the revenue projections in current fiscal, he said a 30-35 per cent topline growth was expected.

Other projects

Mr Oberoi said the company was investing close to 16 per cent in the Cyber City project in Hyderabad, with the balance coming from a local partner.

The Kolkata Oberoi Flight Kitchen unit, coming up at land adjacent to the airport, entails an investment of Rs 70 crore.

Flight kitchens account for close to 12-13 per cent of the group’s turnover. Asked on the prospects of a second hotel in Kolkata, Mr Oberoi said, “We are looking for suitable land and also a strategic partner.”