Friday, January 11, 2008

3,000 hotel rooms near IGI by 2010

The GMR-backed Delhi International Airport Ltd (DIAL) has invited proposals from hospitality sector majors for building over 3,000 rooms in the hotels of all categories near the upcoming airport before the Commonwealth Games in 2010.

The consortium was allowed to commercially develop 5% of the total 5,000-acre area earmarked for Delhi Airport. In the first phase, 45 acres of the 250 acres allowed for commercial use will be used to develop a hospitality district.

‘‘About 50 players have sent expression of interest and 45 of them have been asked to send proposals by this month-end. The idea is to have over 3,000 rooms in the entire segment of hotels — from budget to five-star deluxe. The financial model will be finalised next month based on the kind of proposals we get,’’ said a DIAL official.

This hotel district will be linked by both the Metro and a six-lane road. DIAL has formed a full-owned subsidiary, Delhi Aerotropolis Pvt Ltd, for its hospitality arm.

If priced correct — and not overly as done by DDA while auctioning land for hotels — the DIAL hospitality district could help meet the massive gap in demand and supply for rooms in Delhi.

According to the Hotel and Restaurant Association of North India (HRANI), Delhi has just over 14,000 rooms in the organised sector while the requirement is 40,000 rooms.

Of the existing accommodation, 5,500 rooms are in five-star and five-star deluxe category for which the tariffs are in the range of Rs 10,000 to Rs 18,000. These rates are likely to be hiked by another 15 to 20 % in the coming peak travel winter season.

‘‘As per projects in the pipeline, Delhi will see 12,000 more rooms in 40 new hotels (three-stars and above). Still there would be a severe shortfall going by current demand,’’ said Deepak Sharma, HRANI general secretary.

Prohibitive land cost in Delhi has seen several big players looking elsewhere in the NCR for setting up hotels. For instance, an Oberoi is coming up at Gurgaon and Taj is also learnt to be scouting for a site there.

Leading hoteliers want DIAL to clearly state the terms and conditions on which it is inviting investors to build in its hospitality district. ‘‘DIAL should learn from the mistakes that DDA made by overpricing its auctions. Setting up a five-star costs on an average, Rs 50 lakh per room (without accounting in land cost), which means a 100-room hotel will cost Rs 50 crore. So if DIAL wants top professionals, it has to offer attractive terms,’’ said Rajendra Kumar, president HRANI.

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