Builders create room for 15 five-star hotels

By siliconindia   |   Friday, 22 February 2008, 01:20 IST
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Ahmedabad: It is boom time for hotel construction in Ahmedabad. Since there is a scarcity of hotels in the city, local builders are forging joint ventures with leading hotel chains and joining the hospitality bandwagon, reported Business Standard. Over a dozen five-star hotels are planned in Ahmedabad and the preliminary work on almost half-a-dozen has already begun. "There are 15 five-star category hotels coming in Ahmedabad. If we take the average area of a five-star hotel to be 300,000 square feet, then at an average cost of Rs 5,000 per square feet the overall investment comes to about Rs 2,500 crore ($625 million)," said Shekhar Patel, President of Gujarat Institute of Housing and Estate Developers (GIHED). Many of these hotel projects will be displayed at the upcoming GIHED Property Show 2008. Local real estate developers including JP Infrastructure, Savvy Infrastructures, Ganesh Housing, NG Group and Dharmadev Infrastructure are in talks with various hotel chains both national and international. Savvy Infrastructure is setting up a 240-room hotel on the SG Highway. "This will be the largest hotel in Gujarat and will be run by Crown Plaza. We aim to invest about Rs 160 crore in this project," said Jaxay Shah, director of Savvy Infrastructures. More over, ITC is setting up a hotel in the satellite area while the U.S. based Pacifica Group has tied-up with Marriott for a five-star hotel project. Among other hospitality projects coming up in the city include Cambay Spa & Resorts, Gulmohar Greens, and Indraprasth. The Delhi based Parsvnath group is in talks with various hotel chains including Le Meridien for setting up a hotel in Vejalpur, sources said. Another Delhi based realtor Alpha has roped in 'Ista', to be developed and managed by hospitality player IHHR in its 1 million square feet development project at Vastrapur. However, not all announced projects may reach actual completion, owing to the fickle dynamics in the hospitality sector. A minimum of seven to eight major projects have been lined up for 2008, each with an average 100 to 120 room capacity. "The hospitality sector in Ahmedabad currently features an investment climate that is suitable for those who aim to invest in a business model. Such a model generates cash flows rather than short-term returns, and is the favored route for those who invest in hospitality in Europe and in the U.S. In other words, investing in Ahmedabad's hospitality sector may not be lucrative for individual short-term investors with a low risk appetite, though the long-term prospects are definitely encouraging," said Anuj Puri, Country Head and MD of Jones Lang LaSalle Meghraj.