Shangri-La set for a September soft-launch

The Shangri-La Hotel being developed by Phoenix Mills Ltd (PML) in central Mumbai is likely to open with half the room inventory in the second quarter of the current fiscal. 

The hotel will have a soft launch with 230 guest rooms as the Phoenix Mills management wants to hit the market in time for business season and achieve efficiency in operational costs.
When fully operational, the hotel will have 483 guestrooms and 23 serviced apartments.

Shishir Shrivastava, executive director, PML, said, the primary objective is to commence operations at the earliest.

“Since we are planning a soft launch, it will not make business sense to launch with the entire guestroom inventory. Also, operating with a higher inventory base will mean incurring operational expenditure on all guestrooms when the occupancy levels will be lower during the initial months. It will help us be more efficient in terms of cost of operations,” Shrivastava said.
The balance guestrooms are expected to hit the market in 4-5 months after the soft launch. The PML management expects the average room rates at the time of soft launch to be more than Rs10,000 a night.

Most of the hotel projects being developed by PML are under a separate special purpose vehicles (SPVs). Shangri-La Mumbai is under Pallazzio Hotel and Leisure, a subsidiary of PML.

The overall cost of the hotel project is Rs 700 crore, of which Pallazzio Hotel has already pumped in Rs 483 crore in equity, while the balance is debt. Investors in Pallazzio Hotel include Pune-based Avinash Bhosle Group, which holds an instrument that will convert to 27% stake at the time of maturity.  “The conversion is time-bound and not linked to any performance parameter. It will happen in April 2015,” Shrivastava said.