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Monday, January 15, 2007

Kamat Hotels sees room to grow in multi-segments, global plans

In a bid to scale up operations, Indian multi-brand hospitality company, Kamat Hotels (KHIL), is venturing into global markets and seeking domestic partnerships.

The 70-year-old domestic hotel and restaurant chain is entering China and South Africa, and has signed up with Hindustan Petroleum Corporation (HPCL) to operate restaurants in its retail outlets along the highways called ‘Vithal Kamats’ and budget hotels called ‘Kamfotels’. It is also setting up heritage hotels by developing old forts as hotels in Maharashtra.

“Our brands span across all segments from a five-star brand Orchid Ecotel to 4-star Lotus Suites to budget brand Kamfotels and heritage hotels and vegetarian restaurant chains. There are very few domestic hotel companies, which have entered all the segments in the country. We want to be well cushioned,” said Param Kannampilly, director, KHIL.

“While Indian Hotels, owner of the Taj brand, spans across segments, the Oberois and Leelas are primarily only in the premium end. While we want to expand business and our brands, we will focus on corporate hotels catering to business travellers in Tier 1 and Tier 2 markets and for the moment, will not cater to leisure travellers,” he added.

KHIL is launching a 5-star, environment-friendly 176-room hotel in Gold Reech City, Johannesburg, called Orchid International. In China, the group is launching a 5-star, eco-friendly 350-room hotel at Unesco’s World Heritage Site, Lijiang. The hospitality major has also shown interest in other potential destinations in the Middle East and Mongolia.

“Most of the global markets are being penetrated through the management contract route. That’s a much faster way to expand, where we give our expertise, but it does not involve investment. At a later stage, we may look into investment into these properties,” Mr Kannampilly said.

After its break-up with ONGC to open restaurants along the highways, it has now tied up with HPCL, India’s second largest integrated oil company. It will open 40 vegetarian outlets at HPCL pumps. “These restaurants will create customer pull through the differentiated travel-related offers, thereby becoming the preferred choice for fuel and non-fuel products,” said officials.

KHIL aims to have 50 budget properties operational by 2010 across Gujarat, Maharashtra, Goa and South India under the brand name ‘Kamfotel’, with room rates of around $20-25 per night. It is also developing old forts as hotels in Maharashtra.

The Shivaji Fort in Sasvad is a 42-room hotel likely to open in November. The Murud-Harni heritage fort is also being developed into a hotel, but a launch date has not been decided. “We take these forts on lease and then develop them,” Mr Kannampilly said.

With the recent plans for expansion, the company expects a 50% growth during 2006-07. KHIL is owned 78% by promoters and currently there are no plans to dilute stake to private equity investors.

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