It's consolidation time for Lalit Suri Hospitality Group.
One of the largest privately-owned hotel chains in India won't be taking up any new project, putting on hold its plans to expand into the mid-segment through its brand The Lalit Traveller.
Apart from slowdown, the group has faced significant cost overruns in two heritage restoration projects, in Kolkata and London, that has also dampened Suri's mood.
"Currently, we are in consolidation mode, and not going for any new developments apart from our two current projects, restoration of heritage buildings in London and Kolkata, and a greenfield project in Ahmedabad. After consolidation, we would go into the next level when we would go into mid-segment. I am waiting for the right time but first I would complete these two projects," chairperson Jyostna Suri said.
The first two hotels under The Lalit Traveller have opened in Jaipur and Khajuraho with 25 more hotels planned in the next five years.
"The restoration work (of the erstwhile Great Eastern hotel) has gone on and on, and the costs have far exceeded the original budgeted amount many times over. The project was supposed to get completed two year ago. Since we started work, every six months costs have added," Suri told mediapersons post the executive committee meeting of industry body Ficci at the hotel, which was reopened partially in 2013.
The property, built in 1841, during the British era, once had the privilege of having Queen Victoria as its guest.
Suri is having a similar experience of significant costs overrun in restoring heritage building, St Olave's, built around the same time, near Tower Bridge at the heart of London.
"What we are doing in London is also a restoration, converting a grammar school into a high-end boutique property. We will open it in September next year. This project is also overshooting the budget, and investment into it can go up to £45 million," Suri said.
The property was bought in 2012 for £28 million.
There are, however, no regrets in getting into such restoration projects.
"I will never have any regret in taking over the Grand Hotel and restore it, which is Asia's first luxury hotel. Restoration of iconic properties overshoot budgets, as in most of the cases once you touch it many things come up which weren't envisaged before," she said, detailing the reasons of delay particularly involving creating underground car parks.
The group, unlike the industry practice, owns all its existing 3,500 rooms.
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