Pinnacle

Berggruen Hotels, a new hotel venture backed by Berggruen Holdings, is launching their new brand of boutique budget hotels, `Keys’ in India.

With an equity capital of $ 100 million, Berggruen Hotels will build a minimum of 38 hotels in the next five years in India. The hotel company is in active negotiation with 24 other sites and the first hotel launch is scheduled for June 2008 with an average room rate of Rs 1400-2200 depending on the location.

An associate company will also set up hotel management schools around the country to develop a resource pool.

Berggruen Hotels will operate 38 hotels (4200 rooms) distributed across tier 1, 2 and 3 cities, each with 100 to 170 rooms and a company turnover in excess of Rs 350 crores in the next 5 years.

Rex

Good news for India.
I've also read that the next sector to see the boom in India after retail and real estate is - the hospitality sector. But see, eventually its the whole economy of the country that is going to prosper from these.

If hotels are built, to cater to the hospitality industry, the real estate industry is surely going to benefit. Also the tourism sector will be the other beneficiary.

With the large investments in India, there is actually a dearth of hotels in the country. Moreover, Indian hotels are one of the most expensive in the world. If you go to cities like Bangalore, you pay to the amount of Rs.3500 to stay in a congested room in the highly demanded Airport area. .

While its cheaper in Singapore and Bangkok by the same configurations.

Hope things change for the better.

Pinnacle

Rex, the biggest hurdle for the expansion of the hospitality sector is the abnormally high cost of Land.
And that is bad news for the Budget Hotel sector

Infact the upsurge in real estate market has but brakes on expansion plans of many hotel groups who do not have deep pockets. Add to that, is the long gestation period in starting a hotel.

The govt should ideally take the initiative by alloting Lands to Budget Hotel chains at lower market price with the Caveat of Non Change of user. The railways auctioning their land usage rights over major railway station, for construction of Hotels, is also a step in the right direction.
But it has to be careful not to get unrealistic with the prices and also make provisions for infrastructure like parking, electricity, sewrage etc.