EIH to focus more on managing properties (Lead)
Kolkata : Hospitality major EIH Ltd, which is intending to be "asset light", will focus on managing properties more rather than owning them, an official said here on Wednesday.
"We own too much real estate. We had taken a decision that we should also try managing hotels. Major hotel companies do not own too many properties. We wish to be asset light," company's Executive Chairman P.R.S. Oberoi said.
He also said the ratio between owned, substantially owned and managed hotels in the company was 70:30 and the proportion of managed hotels would increase. Oberoi, however, clarified that the hospitality major would continue on building hotels in future along with focus on managing properties of others.
"We got properties in Bengaluru, Goa, extra land in Agra. It does not stop us doing our own projects," he said.
According to him, the company has a very "low debt of Rs 500 crore".
He also said The Oberoi, New Delhi re-opened after 18-month renovation and restoration, three months ahead of schedule.
The Oberoi, Marrakech is in the final phase of completion and is scheduled to open in the first quarter of 2019 and the construction of The Oberoi, Doha is currently underway, he told shareholders at the 68th Annual General Meeting here.
He also said management contracts were signed recently for a luxury hotel and a Trident hotel located on Koh Tan Island in Thailand.
A luxury wildlife resort on the edge of Massai Mara National Reserve, Kenya is under planning and this will be located on a 5,000 acre site and is scheduled to open in first quarter of 2020, he said.
He also said its planned hotel project in Navi Mumbai is currently "on hold" as the project is still awaiting environmental approval from the government.
Speaking on the new indirect tax rate, he said, "The GST for hotels charging Rs 7,500 or more is 28 per cent. Most international travellers are accustomed to much lower GST in other Asian countries. GST at the rate of 28 per cent will, undoubtedly, affect travel and tourism to India."
"The hospitality industry has made several representations to the government in this regard. We hope there will be reduction in GST for hotels in the immediate future," he said.
He also said 50 rooms would be added with an estimated cost of Rs 100 crore in its oldest-owned property Oberoi Grand in Kolkata.