Neesa Leisure adopts three-pronged growth model for hospitality expansion

Wednesday, August 26, 2009, 10:00 Hrs  [IST]
By Dheera Majumder | Gandhinagar
Publication : Hospitality Biz India

With an aim to expand its footprint in the hospitality sector, Neesa Leisure Ltd (NLL), the Gandhinagar-based company in Gujarat, will develop its portfolio by leasing, acquiring and managing properties. The company has divided its three-pronged growth model in terms of the locations and the property’s target clientele. However, its main aim is to set up properties and convention facilities in locations with potential for meetings, incentives, conferences and events (MICE) clients. The company, which is also into timeshare properties, will consider acquisition and leasing of resorts and managing them under its ‘Cambay’ brand to build up this segment. It is also in the process of fine-tuning its offering and business development skills to develop its future business hotels under a management contract.

Speaking exclusively with Hospitality Biz, Sanjay Gupta, Chairman, NLL, stated, “We want to create properties at preferred conference destinations. Our future locations will be decided according to our demand driven business model. We have a few locations under consideration, which have the potential for business being generated from pharma, FMCG, IT and telecom companies.” The company does not want heavy capital expenditure led growth to develop the business hotel segment in the next three to five years.

By 2009 end, NLL will operate about 711 rooms. In September 2009, it is scheduled to launch a 32 room hotel in Udaipur and a 22 room property in Goa. The hotel in Goa has been acquired on a seven year lease period. It is also launching its second property in Ahmedabad, a 100 room property during the same period. It will add 70 rooms to its inventory by November 2009. Besides, it is also adding 30 rooms at its existing property in Jamboli, Jaipur by 2009 end. The company aims to have a total portfolio of 10 properties by 2010 end while managing a total of 1,000 rooms. It is set to launch a 100 room property in Neemrana in June 2010 and a 60 room property in Jodhpur by August 2010.

NLL is also developing a hospitality district in the Dahej SEZ, Gujarat and has launched a special purpose vehicle (SPV) called Dahej Hospitality Ltd for the same. The hospitality district will include a business hotel, a convention centre and serviced apartments spread across three and half lakh sq ft area. While the project is presently in the planning phase, the company is finalising its funding procedure. The project is estimated to cost Rs 160 crore and will have a 50:50 debt equity ratio. “The project’s funding will be done partly through the investment we have received last year from Axis Private Equity and partly through internal accruals and other private equity investors,” Gupta stated. The first phase of development with 100 rooms in the SEZ is expected to be launched by 2010 end.