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Mumbai property on Park menu

Calcutta, May 22: The Apeejay group, owners of the Park chain of hotels, is keen to acquire a property in Mumbai to fulfil its ambition of having a footprint in all the metros.

Vijay Dewan, managing director of Apeejay Surendra Hotels, said the group had examined some properties in Mumbai, but they did not fit the bill. “We continue to look for acquisition possibilities in Mumbai.”

The chain, he said, was looking for a property of 100-150 rooms. A property in Mumbai could cost in the range of Rs 50-75 lakh per room. Though he did not indicate a specific budget for the acquisition, it is understood that the Apeejay group could spend up to Rs 100 crore for it.

The group spent around Rs 150 crore on two properties in Chennai and Bangalore that it acquired and renovated over the last couple of years. It has three other hotels in Calcutta, Delhi and Vizag.

Meanwhile, the Park has entered into a marketing tie-up with Design Hotels, which markets 104 hotels in 81 locations from Miami to Bali and Buenos Aires to Tokyo.

“We expect our foreign exchange earnings, currently pegged at around Rs 35 crore, to increase by 30 per cent after this arrangement which will give us a marketing partner in our main source markets — the US and Europe,” Dewan said.

The hotels in Calcutta, Chennai and Bangalore will be covered by the arrangement at present. Under the deal, the group will have to pay $ 45,000 per year to Design Hotels for the arrangement. It will also have to pay a commission on sales.

The combined foreign exchange earning of these three properties is around Rs 10 crore at present. The rest comes from the property in Delhi, which has a large overseas clientele.

The chain earned Rs 76 crore in revenues in 2002-03. Dewan said its operating profit was about 30 per cent of the revenues which is in line with the industry standard.

Officials of Design Hotels said the partnership with the Park was the first step towards setting up a representative office in India, which over the next five to 10 years could emerge as an important source destination.

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