The Oberoi Group, which has several projects on hand, has kept on an even keel, its plans to expand room strength by 50 per cent adding 2,600 rooms by 2012. An investment of Rs. 350 crore is planned, of which Rs. 100 crore has been spent.
Addressing a pressmeet, after the company’s annual meeting here, P. R. S. Oberoi, Chairman, East India Hotels, said average room rates had dropped by 30 per cent over the past year. “We have coped by trying to cut waste and by curtailing capital expenditure”.
On ITC’s holding of 14.8 per cent in EIH, he said that while EIH was open to any proposal, but none has been received till now. “Our shareholding has increased from 38 per cent to 46.4 per cent over the last two years,” he said adding that he had read the ITC chairman’s comments in this regard, (that it would not mount a hostile bid but would be open on any alliance should the Oberois want it) but has not heard anything further on it.
Mr. Oberoi said that while the plan for a new flight kitchen in Kolkata had been scrapped following the withdrawal of many foreign fliers from the city, the projects at Kochi, Kozhikode and Mauritius would become operational by 2010 and the Delhi one by 2011.
He announced that the group signed a management contract last week to operate a 100-key 5-star Trident Hotel in Dehradun. This apart, through a combination of management contracts and owned hotels, Oberois would add capacity in Bangalore, Hyderabad, Mumbai, Gurgaon, Dubai, Abu Dhabi and Oman. Mr. Oberoi said that Oberoi, Mumbai, the target of the November terror attack, would be re-opened with a new look by March 2010. He said that complete restoration work had been taken up at the hotel at an expenditure of Rs. 120 crore to repair the damages due to attack as well to refurbish and upgrade the technology at the 20-year-old hotel.
He said an insurance claim of Rs. 86 crore has been provisionally estimated for loss of business following terror attacks on Trident Hotel and Oberoi, Mumbai, and Rs. 60 crore had already been paid.
Earlier, addressing shareholders, he said the financial crisis followed by the terror attacks and now the H1N1 threat has plunged the Indian hotel industry into one of its most difficult periods.
“I have not seen such bad times before — the situation is not good,” he told shareholders at the annual general meeting. A revival could only be expected by 2010-11 at the earliest and business conditions during the rest of the current year would continue to be difficult for the hospitality industry, he said.