Foreign companies for hotel development
To meet its target for Commonwealth Games 2010, the government is considering relaxing entry restriction for foreign players in construction of hotels and resorts. It is looking at a proposal to bring down minimum development norm of real estate from existing 50,000 square feet to 20,000 square feet for hotels included in ‘mixed’ real estate projects. This would set the ground for players with lesser net worth to invest in Indian hospitality sector. With Commonwealth Games just two years away, Delhi needs 30,000 additional rooms to accommodate an estimated 1.5 lakh tourists. Similarly, other states also require additional, rooms to tackle the influx of industrial policy and promotion (Dipp), at present, is considering relaxing entry norms in case of hotels only. However, the Investment Commission had suggested to the government to relax the entry restriction in the entire sector, which includes housing and shopping arcades as well. The Dipp has already circulated a Cabinet note proposing waiver of two conditions –– the three-year lock-in on foreign investment and the minimum investment criteria of $5 million for joint ventures or $10 million for wholly owned ventures. This waiver has also been sought for hotel related real estate projects.

Maldives-based hotel plans resorts
Maldives-based hotel plans to set up resorts in Goa and Kerala, as part of a strategy to tap into the Indian market and promote its retreats in the island nation. About $50-60 million will be invested in the Indian properties by year-end, with funds being generated internally, said sales & marketing director B A Rahim. The group already has marketing offices in Bangalore and Mumbai.

LBZ hotels can’t grow bigger
The Centre is planning to increase the floor area ratio (FAR) of existing hotel properties in Delhi to get more rooms. The proposed norms will mean that hotels can be allowed to have 35 to over 100 more rooms. Upcoming projects will also benefit. For instance, the Leela Palace coming up on a three-acre plot bought for a record Rs 611 crore in Chanakyapuri may be able to increase its original 211-room capacity by over 100 rooms. Existing hotels will also add rooms as big players are just waiting for the final nod. The 418-rooms Taj Palace on SP Marg could see some expansion. The nearby 442-rooms Maurya got a new block about two years back and may not go in for an immediate expansion. But the Lutyens’ Bungalow Zone (LBZ) has been excluded. This means that nine hotels located in LBZ, including Oberoi, Imperial, Taj Mahal, Taj Ambassador, Shangri-La, Le Meridien and Claridges, may not be able to add any rooms. The hotel industry has taken up this issue with the government. Considering the heritage value of this area, the apex association of hotels has said no new hotels or guesthouses may be allowed in LBZ but existing properties should not be denied the benefit of additional ground coverage. At present, Delhi has 11,000 rooms in star category hotels while the shortage, it is feared, would be of nearly 40,000 rooms by 2010. An increased FAR, says Federation of Hotels and Restaurant Association of India VP Rajendra Kumar, will lead to nearly 6,000 rooms being added within a year in the existing properties that have the infrastructure to support them. The LBZ hotels kept out from the proposed change are fuming. The Ambassador, for instance, has 88 rooms, for instance, and says can add up to 40 more. “By leaving out these nine hotels, we would sacrifice nearly 1,500 rooms that could have been added very fast,” said Kumar. Claridges spokesperson Harshita Singh said the property has 137 rooms and would have considered adding capacity had the rules been relaxed. Ditto for the 358-room Meridien, whose director (marketing) Akhil Mathur said: “If given a chance, we would be interested.” The response of the 460-room InterContinental the Grand in CP was the same. next..