New Delhi, Dec. 21: The Jaypee group of hotels, part of the Rs 2,000 crore Jaiprakash Industries, is getting into expansion mode and plans to build a five-star deluxe hotel in Jaipur.

“We are currently in negotiations with a few people. We might either buy land and build the hotel from scratch or purchase an existing hotel property and then renovate it to our standards. We are open to both the options,” said Pradeep Kalra, senior vice-president, sales and marketing, Jaypee Hotels Ltd.

Industry sources say that the group was very close to signing a deal with Khasa Kothi, a property of Rajasthan Tourism Development Corporation but it fell apart because of ‘technical glitches’.

The group has already set aside a budget of Rs 80 crore to Rs 100 crore for the new hotel in Jaipur. Industry insiders say Jaypee hotels had put its expansion plans on hold after grandly announcing that it would build two five-star hotel properties in Jaipur and Udaipur by the end of 2001 at a cost of Rs 160 crore to Rs 180 crore.

The group is set to receive stiff competition from Rambagh Palace and Jai Mahal Palace in the luxury hotels segment. However, both Rajputana Palace and Hotel Trident (part of the Oberoi group of hotels) are fairly popular hotels for tourists in the standard hotel category.

At present, Jaypee group of hotels services its corporate and leisure traveller through its four five-star properties. While hotel Vasant Continental and Siddharth are targeted at the five-star market as well as first-class business segment, Jaypee Palace hotel in Agra and Residency Manor in Mussoorie are five-star deluxe hotels.

The hotel’s marketing strategy is aimed at enlarging foreign inbound tourists and increasing the mix of the corporate segment for higher yield of business.