The Telegraph
Since 1st March, 1999
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Oberoi dream chugs along rail track

Calcutta, Sept. 18: EIH — erstwhile East India Hotels, the company that operates the Oberoi chain of hotels — is keen on operating a luxury train, its chairman P. R. S. Oberoi said today.

“The Palace-On-Wheels is, by no means, the ultimate in luxury trains — it could be much better. We are keen on running a luxury train, and could operate it jointly with the rail ministry,” Oberoi said.

A few years ago, EIH had considered buying out a luxury train in the UK from the Scottish Rail, but the train was too old, Oberoi said. EIH had also bid to operate the Palace-On-Wheels in Rajasthan, but could not bag the contract.

Down south, EIH is launching a luxury cruise in the backwaters of Kerala. The boat, Vrinda, with 8 deluxe cabins could accommodate 16 passengers, and would offer 2-night packages.

“We could launch more boats in India if the experiment in Kerala is successful,” he said.

Commenting on performance, Oberoi said, “Business is better this year, but just about. It should improve significantly from October.” Room rates had stopped falling, but they were not expected to recover till next year, he added.

Responding to shareholders’ suggestions at the AGM that the promoters should corner 51 per cent of the company’s shares, Oberoi said: “We continue to increase our holding in the company. Our stake should go up to 44 per cent soon.” The Oberois held 42.5 per cent at the end of the last financial year.

Though EIH has put on hold its investment plans, the company could grow through management contracts. It is set to enter into agreements for management of two properties in Maldives, and Dubai. The draft agreements for the management contracts are being prepared.

Both these hotels will use the ‘Oberoi’ brand, though EIH will not have any equity stake in them. “The construction of these properties will begin in 8-10 months,” said S. S. Mukherji, EIH’s managing director.

The contract for management of the hotel in Maldives is for 26 years. “We are negotiating with owners of the property in Dubai, which we intend to manage for 40-50 years,” he added.

EIH has recently tied up with Hilton for co-branding and marketing of its mid-segment Trident properties. Oberoi said the company’s management was now looking to reach a similar agreement with an international chain for the properties that don the ‘Oberoi’ brand.

“The Hilton deal took three years. We were close to finalising a deal for the Oberoi properties in September 2001, but it could not be concluded. We were again close to an agreement earlier this year when the war in Iraq broke out. You can’t conclude these deals in a hurry,” he added.

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