Coffee Day Hotels and Resorts on Friday said it planned to invest about Rs.200 crore to set up 10 new properties under the brand ‘The Serai’ in the next five years. It is also looking to hire around 750 people to support its expansion plans.
The firm, a subsidiary of Amalgamated Bean Coffee Trading Company Ltd. which operates the Cafe Coffee Day chains, expects that the hotel industry, affected by slowdown in economy and inflation, will see better times in the second-half of the current fiscal.
“We will be expanding our national presence . We are looking to invest about Rs.20 crore for each property,” Coffee Day Hotels Head (Marketing) Anand Menon told The Hindu.
The company, which operates in the ‘boutique luxury segment’, has three resorts in Chikmagalur, Kabini and Bandipur in Karnataka— which put together have 73 rooms. With the addition of 10 new properties, the company is looking at 300-350 rooms.
On the current market situation, Mr. Menon said the industry was going through a rough phase.
“I won’t say we have not been impacted. But since I have a small inventory, the impact has not been much. One of the fallouts of this is that, this year, we are not going in for a price hike. Usually, keeping in mind the operational costs, our prices go up by 5 per cent. Things will look up in the third and fourth quarters,” he said.
Of the 10 new properties, one will come up at Havelock Island in the Andaman & Nicobar Islands, followed by one in Mangalore. The two are likely to be operational by the end of 2014.
The company is looking at setting up a property in Kerala and Mysore. The location for the remaining properties is yet to be finalised. However, Mr. Menon said there was a possibility that one would be in North India.
The expansion would be a mix of green-field projects and acquired properties, he added.
The company enjoys an occupancy rate of about 72 per cent. “We are expecting this number to grow as we have not increased our prices,” Mr. Menon said.