Gurgaon: The UK-headquartered InterContinental Hotels Group Wednesday said it will develop 20 properties across major Indian cities over the next two-three years to tap the growing demand for both luxury and comfort hotels in the country.

The group also announced that its management contract with Grand InterContinental in the national capital's central business district and at Srinagar in Jammu and Kashmir was not being renewed as its owners wanted to manage the properties on their own.

"The hotel industry is very sustainable, and there is still a lot of demand with only 30,000 rooms in the organised segment," said Jan Smits, chief operating officer for Southern Asia and Korea.

"We have conducted a detailed study and found that there is lot of scope in the country," Smits told reporters here, adding the 20 new properties would add some 5,000 rooms as part of its expansion plans in India.

The group, which has a portfolio of 13 hotels in India, will develop the new properties under three brands - InterContinental Hotels and Resorts, Crowne Plaza Hotels and resorts, and Holiday Inn Hotels and Resorts.

"Our strategy is to have profitable portfolio of hotels in major metros and other key cities including Pune and Dehradun, where there is a demand for internationally branded and managed hotels," Smits said.

The hotels will be constructed by developers MGF-Emaar, Eros and Today.

"A few of these projects have already begun, others have just started. We expect that these hotels will come into existence by 20111," said Rajiv Sharma, associate vice president - Development, South West Asia, IHG.

InterContinental also said its contract with Grant Intercontinental in New Delhi and Sringar expires this year. "We are not going to renew the contract. They (Grand) now want to run their hotels alone," he said.

After the break-up, the two hotels will cease to have "InterContinental" in its name.

The InterContinental group largely runs hotels on franchise and owns only a few hotels.