KBJ announces diversification
The KBJ Group, which has business interests in jewellery and real estate, has announced a Rs500 crore hospitality plan to be executed in two phases over the next four years.
Seeing a huge potential in the under-served Buddhist tourist destinations and other Tier-II cities, the group has firmed up plans to open ten hotels in partnership with Thailand-based hospitality chain Absolute Hotel service (AHS).
“There are a large number of tourists who come from countries like Thailand, Japan, Korea, and China, to visit Buddhist places in India, which do not have good quality hotels to serve them. We are looking at filling up this gap with hotels which will offer all the best amenities that international travellers want,” said Joseph D’Couto, chief executive officer, KBJ Hotels.
In the first phase, the company will open five properties in Varanasi, Bodh Gaya, Kushinagar, Khajuraho, and Goa.
The land has already been acquired for these properties, with the first one opening in Varanasi in August 2011, which will be followed by the other four in the same year. The Varanasi property will have 130-rooms and the other properties will have between 70-to-111 rooms.
“We are looking at a five-star category for the Varanasi and Goa properties, whereas the remaining three hotels will be between three-and-four-star,” said D’Couto.
KBJ will invest Rs250 crore for the above five properties. “The funding will be done through debt and private equity besides our own contribution of Rs80 crore,” said Mohit Kamboj, chairman and managing director, KBJ Group.
He said that they are talking to Indian banks such as State Bank of India and IDBI for debt.
“We are also in the advanced stages of discussion with foreign private equity funds for the remaining contribution. We will develop these properties on our own using local and international architects,” he added.
All the properties will be run under the KBJ brand to be owned and operated by the newly floated company, Absolute KBJ Hotel Services India, which has National Capital Management Private Limited (NCMPL) as its third partner.
AHS will bring in all the know-how to run the hotels besides helping in tapping guests from the source markets of Thailand, Japan, Korea, and China.
In the second phase, KBJ will open five more hotels in Aurangabad, Ludhiana, Surat, Jaipur, and Rudrapur. The company plans to open all these by end of 2013. In addition to owning these properties, the company is also looking at managing others’ properties.