Leela’s $500m expansion plan

To look for more management contracts

KOLKATA: Hotel Leelaventure, the holding company for Leela Palaces & Resorts, may explore more options in the management space.

Also, the company plans to add 1,625 rooms to its current cache of 1,114 keys through five new properties.

Investments towards expansion are about $500 million. About $250 million has already been invested. For the balance, the company has $110 million in cash on its balance sheet, which includes $100 million raised through an FCCB (foreign currency convertible bond) issue.

The rest, according to company sources, will be funded through internal accruals of $40 million per annum in the next four years.

The hospitality company, which owns and manages all its four properties across Mumbai, Bangalore, Goa and Kovalam, has already decided to test waters in management contract through its upcoming project in Gurgaon.

If its Gurgaon experiment proves fruitful, the company, the sources said, may take the management route for more properties. Captain Krishnan Nair told DNA Money:

“While our hallmark has always been greenfield ventures, we are open to exploring the management route provided the quality of the property, ambience and architecture meet our standards.”

While Gurgaon and Udaipur properties will open in 2008, the Chennai project will go on stream a year later. Delhi, Hyderabad and Pune will throw open their doors in 2010.
All the properties will be in the premium deluxe category.