Chennai, Sep 22 (IANS) Hospitality major Hotel Leelaventure Ltd. will be launching a new brand, Essence by The Leela, an entry-level five-star hotel, a company official said Saturday.
"We will soon launch a new brand Essence by The Leela. The brand will be for entry-level five-star hotels. We are looking at tier-two towns. Hotels under the new brand will have 100 or more rooms," Vivek Nair, vice chairman and managing director, said here Saturday on the sidelines of the annual general meeting of South India Hotels & Restaurants Association.
He said the group is looking at six to eight under the new brand. Most of the hotels will be on management contract model hotels to be managed by the group for a fee while the property is owned by another person.
With the launch of the new brand, the company will be following in the footsteps of the Taj group, that has Vivanta by Taj.
According to Nair, the company plans to follow two business models for expansion without heavy capital expenditure.
He said the company will be looking at pure management contract model whereby it would lend its brand and manage a hotel property for a fee.
The second model is to divest minority stakes in its existing hotel property to raise cash.
He said in two years, the company plans to raise around Rs.1,000 crore by divestment if other ways of raising funds do not materialise.
Nair said the company sold its hotel in Kovallam in Kerala for Rs.500 crore while retaining the management of the property.
According to him, if the hotel industry is given the infrastructure status, it would enable Hotel Leelaventure to raise funds at cheaper rates.
Nair said the group plans to increase the number of rooms under its fold by around 1,500 rooms to 3,500 rooms in five years time.
He said a new five star property will be constructed in Agra at an outlay of Rs.200 crore under the brand Leela Palace.
A 60-room hotel is also under construction near Jaipur in Rajasthan, which will be on management contract with the company, Nair said.
According to him the company's new hotel here will go on stream soon after getting the relevant permissions.
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