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Royal Orchid to Build 250 Room Hotel in Powai

Bangalore-based Royal Orchid Hotels Liimited (ROHL) has increased its stake to 74% in Powai-based Amartara Hospitality Private Limited. The company has a 50,000 square foot piece of land in Powai where they plan to build a 250 room four star hotel under our Royal Orchid central brand. The investment for the same is likely to be about Rs 120 crore in total. Royal Orchid is likely to start work at the site in a couple of months and proposed hotel will be branded as Royal Orchid Central. The Powai hotel will be Royal Orchid’s first owned and managed property in Mumbai.

Excerpt from In an interview with CNBC-TV18, Keshav Baljee, President, Royal Orchid Hotels

Q: Just getting some more details on that acquisition of yours. Financially, what’s the return that you are expecting and how would you expect it to pan out in terms of time line? Given that Powai does have some hotels, what’s the ARR and occupancy that you foresee?

A: Powai definitely has some hotels. However, it’s a pretty strong MICE (Meetings, Incentives, Conventions and Exhibitions) destination, so we definitely expect to do well with conferencing business here. Obviously, the hotel should take about 22 months to come on stream. So, we expect the market to further strengthen from here on until then.
In terms of ARR and occupancy, it’s a little early to say that, but we typically expect our hotels to have a payback period of about four-five years. So, we are looking at from that stand point. Obviously we are hospitality players and we have been so for over 37 years. So, we have a long-term perspective in this, we believe that a strong presence in Bombay is essential for our national ambitions. It will go a long way towards also providing linkages with other properties in Navi Mumbai and Pune and in all the other cities across the country. So, having something in Bombay is essential for us which will help us better serve our corporate clients across the country.
Q: When does it come up and start giving you money?
A: 20-22 months from next month, so about 23 months from now
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