Companies

Ista Hotels plans Rs 700-cr investment in next 4-5 years

| | Updated on: Mar 25, 2011

Ista Hotels plans to expand its footprint with four more properties — in Jaipur, Coimbatore, Navi Mumbai and Nagpur — in the next four to five years, entailing an investment of around Rs 700 crore. Ista Hotels, from IHHR Hospitality Pvt Ltd (promoted by a clutch of individual investors, including a few NRIs), currently has four ‘five-star luxury' properties — in Bangalore, Hyderabad, Amritsar and Pune.

The brand's fifth hotel is set to be flagged off in the next few months in Ahmedabad. This will be on a management contract basis. “In the second phase, the company will take up Navi Mumbai and Nagpur projects,” said Mr Ashok Khanna, Managing Director, IHHR Hospitality.

With these projects, Ista would take its total room inventory to close to 1,500 from the current 750. Besides, IHHR Hospitality owns a ‘destination' Spa – Ananda – in Himalayas. “This, in fact, is our first property which came up in 2000, and we forayed into the hotels business much later in 2006. We have been adding almost a property a year since then,” said Mr Khanna.

These hotels, according to him, are currently witnessing, on an average, 70 per cent occupancy “with 35 per cent repeat ratio.” Ista is in a marketing pact with Preferred Hotel group primarily for distribution as well as to give it corporate access in key source markets such as the US and Europe. Elaborating on the brand's marketing strategy, Mr Khanna said, the hotels offer ‘dynamic pricing' which works more like best price of the day, based on several parameters.

Overall, the company has invested Rs 750 crore so far. At 1:1 debt-equity ratio, it is now making an operating profit (before allowing for interest, taxes, depreciation and amortisation), he said. In 2007, Morgan Stanley took 15 per cent equity exposure in the company.

Published on March 25, 2011

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