The site of DS Radisson Hotel in Guwahati. Telegraph picture

Guwahati, Sept. 1: The Northeast will get its first five-star hotel early next year.

The hotel, being set up by the Dharampal Satyapal Group in Guwahati, will be run by international brand Radisson.

The hotel — Radisson Hotel, Guwahati — will be operated by DS (Assam) Hospitality Limited (DSAHL), a joint venture company of Dharampal Satyapal Limited (DSL) and Guwahati Metropolitan Development Authority (GMDA).

Built at Rs 220 crore, the hotel will come up seven years after DSAHL and GMDA signed an MoU on June 1, 2007, the DS Group was incorporated as a joint venture company on August 6, 2007, under the Companies Act, 1956.

“The hotel got a final construction nod at the end of 2009 and we will open the property in the first quarter of 2014,” Bhavna Sood, senior vice-president corporate communications and public relations, DS Group told The Telegraph.

A lot of work has to be done after signing the MoU, which includes getting clearances, land and others. ICRA Limited, a credit rating agency in its August report, has given DS (Assam) Hospitality Limited a double B-plus rating.

“The rating continues to factor in the favourable location of the hotel property being developed by the company in Guwahati, which is an important gateway city for the Northeast. The funding for the project is in place and significant portion of equity contribution has been brought in by the promoters. It has taken into consideration DSAHL’s association with Carlsons Hotels (South Asia) Pvt Ltd (Radisson Brand) which, provides strong brand recognition and offers DSAHL access to Radisson’s global reservation systems,” it said.

The property will be a 196-room hotel with all facilities such as all-day dining, a tea lounge, speciality restaurants, bar, banquet hall, cafeteria, spa, swimming pool and health club, business centre and party lawns, all innovatively conceived and uniquely designed.

The hotel is located at National Highway 37 Bypass Road at Gotanagar near Jalukbari circle and is spread over 4.5 acres.

However, the rating is constrained by sizeable cost and time overruns witnessed by the project on account of excessive rainfalls, unavailability of skilled labour, and difficult topography of the project site.

“It is also constrained by relatively high cost per room, which might limit the profitability and elongate the payback period; market risks arising out of lack of established demand for a five-star project in the region and expected competition from upcoming supply of high-end hospitality projects. These are likely to result in pressures on occupancy rates and average room revenues once the project becomes operational,” the report said.

Apart from DS Radisson, JW Mariott, Taj and Hyatt are the other chains setting up five-star hotels in the Northeast.

Sood said DS Group has always believed that the Northeast has immense investment potential, which was largely untapped.

“The group always believes in treading new growth paths and the region seemed a perfect fit. We stepped into the Northeast in 1998 with mouth fresheners in Guwahati, when the government announced the incentives. In spite of withdrawals of these incentives many times over the years, we have steadily expanded our business in the Northeast,” Sood added.

The investment by the company in the Northeast is Rs 642.68 crore as of now and has allocated Rs 1,400 crore and Rs 1,900 crore for investment in power and cement sectors respectively.

The power and cement investments will be in Meghalaya.