Vivek Nair, vice-chairman and managing director, Hotel Leelaventure, told DNA Money the second brand, in all probability, would be pegged lower than the five-star category.
KOLKATA: Hotel Leelaventure, the holding company for Leela Hotels & Resorts, is mulling plans to introduce a second brand targeted at the Tier II cities where it is yet to have a presence. The modalities on the exact positioning are still being worked out.
Vivek Nair, vice-chairman and managing director, Hotel Leelaventure, told DNA Money the second brand, in all probability, would be pegged lower than the five-star category.
“The Leela brand is very premium and Tier II cities may not be able to sustain it. That is why we may look at a second brand,” informed Nair.
Nair clarified that the group was currently focusing all its energy on current expansion plans — Delhi, Udaipur, Chennai, Hyderabad and Pune — which are likely to be put into effect by 2009. Thereafter, the focus would be on Kolkata and Jaipur. Once these projects are over, the group would look at Tier II cities seriously. While plans are afoot to set up a business hotel in Kolkata, Jaipur will house a luxury resort.
According to analysts, the group is looking to enter new markets, derisk its business model, increase revenues through management contracts and expand to newer markets.
The reliance on the Bangalore market is expected to come down from 56% in FY06 to 43% in FY08-09. “New initiatives are expected to add 9% and 16% to the topline in FY07-08 (E) and FY08-09(E),” said a source.
Overall, the group will be investing Rs 1,230 crore in its expansion projects as well as in the refurbishment of its Mumbai and Bangalore properties.
On the overseas front, it is in talks with a leading developer in Mauritius for managing a greenfield business resort there. Leela officials are slated to visit Mauritius and Abu Dhabi next month to finalise management contract deals at both destinations.
Nair said: “As far as our overseas expansion is concerned, we will focus on the Indian Ocean rim countries since our brand is known is this geographical area… We will be looking at London and Singapore at a later stage.”
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