Room for more

Calcutta, Oct. 28: Molinaro Koger, the US-based hotel brokerage and advisory company, plans to invest $450 million in India in the next four to five years.

Abhijit Das, managing director of Molinaro Koger Hotels India Pvt Ltd, said, “Most of the investment will be for developing properties in the country. We have shortlisted destinations such as Goa, Kerala and Shimla.”

Das said Koger was also considering investments in Bengal. There are plans to survey the state for hotel sites. “We will start mapping Bengal to spot locations. We are interested in north Bengal. If land is available outside Calcutta with good connectivity, we can look at the location.”

Das will meet state officials in the Writer’s Building to discuss the investment opportunities. He will discuss the prospects of eco-tourism in Bengal.

The state has identified Sunderbans and north Bengal for eco-tourism.

In India, Koger is looking to develop resorts or high-end properties with an average room rate of Rs 9,000 and upwards. For the medium segment, it is eyeing a tariff in the range of Rs 3,000 to Rs 6,000.

According to the company, room rentals in the country is growing at a rate of 30 per cent, considered highly attractive numbers in the industry.

Another encouraging sign is of growth being driven by internal demand, the company said. India has approximately 3.9 million foreign visitors a year.

Land prices

However, high land prices are a hurdle before the company’s future plans in India. “In a country of 1.1 billion people, there are only 1.1 lakh hotel rooms.

This shows that the market is completely under-served. Only 40,000-45,000 hotels are institutionally owned or branded properties,” Das said.

Land prices comprise as much as 50 per cent of the cost of developing a property. Das said this should not exceed 20 per cent. “Such a scenario will lead to artificial heating and scarcity in the sector, ” he said.

Developing properties is one aspect of Koger’s business. The company, which inked deals worth $4.7 billion last year, also offers hotel advisory, brokerage and capital source services.

Koger’s entry comes at a time when five-star hotel chains are moving to smaller cities.

Big names such as the Oberoi group, the Taj group, ITC, Carlson Hospitality, the Accor group and Bharat Hotels are preparing their spread for cities such as Jalandhar, Surat, Indore, Nagpur and Agartala.

A saturated market in the metros, demand for budget hotels and the growth of small cities have encouraged the expansion of these chains.