Hotel Leelaventure Ltd plans to set up hotels in Jaipur and Agra to boost its presence in northern India, its top official said. The company, which owns and operates properties in Bangalore, Mumbai, Kovalam and Goa, expects its Udaipur property to be completed in Click here to read full story>
Hotel Leelaventure plans to invest $500 million to expand
its presence in key cities in the four.
It is setting up new hotels in Gurgaon, Udaipur , Cnennai, and New Delhi over the next three years apart from acquiring land in Agra and Jaipur , a top company offical
said here. "
Our room capacity will go up from 1100 to Click here to read full story>
Search for Jobs with Leela hotels
Hospitality major Leela Group will invest $500 million (around Rs 2,000 crore) in the next three years for developing new luxury properties and upgrading the existing hotels in the country.
The group, which currently operates four luxury hotels, is coming up with six new properties in Gurgaon, Delhi, Udaipur, Chennai, Hyderabad and Pune.
Besides expanding presence in India, the Group is looking at Click here to read full story>
Job Description
To ensure the highest standard of quality in food preparation & hygiene in his/ her area, to achieve the optimum level of guest satisfaction and organizational profitability.
Click here to read full story>
See more Kitchen Jobs...
Error: No data was found for RSS feed http://www.hospemag.com/search/label/Jobs-%20FnB-Rest%20Mgr or no items are available for this feed. Please verify that the URL works first in your browser.Job Description To organize and direct a team, that delivers top quality food & beverage products, with a prompt, accurate and personalized service, to achieve the optimum level of guest satisfaction and departmental profitability in an atmosphere of high employee morale.
Click here to read full story>
More Restaurant Manager Jobs....
Job Description
To organize and co-ordinate a F&B Support Team which ensures the availability of equipment and the safety, cleanliness and hygiene of areas and equipment as per international standards in order to maximize organizational profitability and customer satisfaction in an atmosphere of high employee morale.Click here to read full story>
New Year revelry might have ended but celebration continues for hospitality chains in India with cash registers ringing. Hospitality majors such as The Taj, The Leela and the Oberoi raked in good revenues with skyrocketing tariffs and 100% occupancies in Goa, Rajasthan and Kerala.
From the last week of December 2007 ...Click here to read full story>
A US-based private equity (PE) major is investing Rs 5,000 crore into Hotel Leelaventure, the parent company of one of India's leading hotel chains - Leela Palaces, Hotels and Resorts.
Industry sources said the PE firm is most likely Blackstone. "Leela and Blackstone have been in talks for a while," they said. This would be one of the biggest private equity investments in an Indian company.
Speaking to TOI, chairman of the Leela Group, Capt C P Krishnan Nair confirmed the investment. "We have got close to Rs 5,000 crore worth of funding, which will be spent on our ongoing projects and for expansion purposes," he said. But he declined to divulge the name of the PE firm or state how much equity dilution had taken place.
Leela has four properties across the country and has six more in the pipeline - in Chennai, New Delhi, Hyderabad, Pune, Udaipur and Jaipur.
Its New Delhi property, for which the company acquired three acres of land for Rs 600 crore a couple of months ago, will be built at a cost of Rs 900 crore. "This will be the company's largest spend on a single property," said Capt Nair.
Leela also has plans to diversify into an altogether untapped market - religious destinations, in which the organised sector constitutes only 10%."We will launch a second chain of 5-star luxury hotels called Leela Gardens, which would come up in religious/devotional cities," said Capt Nair.
Temple towns and devotional destinations like Mysore, Mookambika, Gokaran, Haridwar and Viashnodevi are being looked at. There are over 150 million domestic devotional travellers in the country, constituting close to 45% of the domestic travel market.
"Leela Gardens won't be as grand as our palaces and resorts. Its USP would be its lavish floral gardens," he said.
The company's expansion drive will also see the development of standalone IT parks in Calicut, Mangalore and Mysore.
The company has developed and operates two such parks in Cochin and Thiruvananthapuram, while IT parks in Bangalore and Mumbai are part of the hotel.
Other stories on Leela Hotels | See Jobs with Leela Hotels | Search for Jobs with Leela Hotels
The hotel major is planning to set up a chain of pilgrim hotels across India and according to sources this would be another Rs 1,000 crore project.
The Leela group will double room capacity from 1,200 at present to 2,700 over the next three years...know more, Click here
Bangalore-based Leela Palace Kempinski has been rated as the favourite business hotel in the world in a Readers’ Choice Awards by a leading UK travel magazine Conde Nast Traveller.
read the full article, click here
Other stories on Leela Hotels | See Jobs with Leela Hotels | Search for Jobs with Leela Hotels
Other stories on Bangalore | See Jobs in Bangalore | Search for Jobs in Bangalore
Conclusion:
We view Hotel Leela’s lackluster financial performance in F2007 as a by-product of its concentration in the Bangalore market, where we believe RevPAR growth has started tapering off. While the company’s peers (IHCL and EIH) showed strong operational growth in F2007, Hotel Leela lagged considerably despite its smaller size. We maintain our Underweight rating on the stock given the high concentration in Bangalore and slow pace of capacity expansion in other cities.
F2007 results were weak:
Hotel Leela reported consolidated revenue of Rs 4.2 billion (up 21% YoY) and earnings (excluding exceptional items) of Rs 897 million (up 27% YoY) in F2007. Its 46.4% EBITDA margin was a decline of about 80 bps over F2006 – however, higher other income in the form of forex gains helped overall profitability.
Where could we be wrong?
While we expect substantial supply to be released in the Bangalore market, there is a possibility of this being delayed due to various factors. In such a scenario, the Bangalore market might not see as sharp a fall in RevPAR in F2009 as we estimate (we currently estimate a 30% fall).
Implications:
We estimate Leela to show 36% earnings growth in F2008 – however, the induction of new supply in F2009 by other industry players may cause earnings to fall substantially. In our view, the Bangalore risk will remain an overhang on the stock.
Summary & Conclusions
Hotel Leela’s financial performance in F2007 was weak compared to its peers – IHCL and EIH – and came despite continuing strength in sector trends. Revenue grew by 21% YoY and earnings by 27%, against IHCL’s 37% growth in revenue and a 40% growth in earnings over the same period. We believe the Bangalore market, which contributes about 45% of Hotel Leela’s revenue, is slowing, thus affecting overall performance. Also, we believe revenue from Bangalore will slow further as we draw closer to F2009 and F2010, when significant capacity will be added by other industry players. The new supply will cause average room rates (ARRs) and occupancy rates (ORs) to drop sharply, thereby hurting profitability. While Leela is adding 1,554 rooms, most of this capacity will only be added in the next 3-5 years. The stock has underperformed the BSE Sensex by about 35-40% YTD and in the last 12 months. We believe the risk associated with Bangalore has been a stock overhang and will continue to remain one as we move closer to F2009. The stock is trading at 13x F2008E basic earnings and 16x F2009E basic earnings. We remain Underweight.
F2007 Results Were Ordinary
Hotel Leela reported consolidated revenue of Rs 4.2 billion (up 21% YoY) and earnings (excluding exceptional items) of Rs 897 million (up 27% YoY) in F2007. EBITDA margin of 46.4% in F2007 declined by about 80 bps over F2006 – however, higher other income in the form of forex gains helped overall profitability. Hotel Leela’s performance was weaker than its peers despite its smaller size. IHCL and EIH both outpaced Hotel Leela on revenue, EBITDA and net profit growth. We believe the high concentration in Bangalore has been the key reason for the growth slowdown, and will continue to impede growth as RevPAR growth in Bangalore slows further. We understand that Bangalore contributes 45% of Leela’s total revenue and 50% of operating profit. The Mumbai property contributes to about 25% of its total revenue. The company has two FCCB issues outstanding – Euro 57 million convertible into equity shares at Rs 62.20 per share, and USD 100 million convertible into equity shares at Rs 90 per share. Should both these issues be converted, they would increase outstanding shares by 27%.
Capacity Expansion – Some Time Away
Hotel Leela has total room inventory of 1,087 rooms. In F2007, the company increased room inventory in its Bangalore hotel from 256 to 358 rooms. All the 396 rooms in the Mumbai property were refurbished during F2007, and hence will be available in the ensuing years. Hotel Leela has announced plans to add another 1,554 rooms over the next 3-5 years in the cities of Udaipur, Gurgaon, Chennai, Delhi, Pune, Goa and Hyderabad. The company has started work on the Udaipur and Chennai hotels, while steps have been taken to start construction in Hyderabad and Pune. We understand that it will release 200,000 sq ft of IT space in Chennai in December 2007. Leela has also obtained approvals to start a floating casino (on a catamaran) in Goa, which will be ready in the next two months. The company is also looking for opportunities in Jaipur and Kolkata, while on the international front, it is scouting for management contracts in Abu Dhabi and Maldives. It intends to participate only in the super luxury segment and has no plans to enter the budget segment. While the company will more than double its room inventory, we believe the pace of expansion has been slow relative to its competitors. Also, the company is expanding into cities where substantial supply is expected to be released by other industry players.
Valuation
We have taken down our F2008 Basic EPS estimate by 19% and F2009E by 16% to account for the weak performance in F2007 and our slower EBITDA growth assumption in F2008. Our target price of Rs 30 is based on a 20% discount to our target EV/EBITDA multiple for IHCL. We believe such a discount is warranted due to Hotel Leela’s smaller size and significant city concentration.
Our target multiple for IHCL (Rs 124.55; PT Rs 180) is based on a 50% premium to our 12-month forward EV/EBITDA multiple of the Sensex. Historically, IHCL has traded in a premium band of 10% to 130% relative to the Sensex, while the five-year average has been about 64%. Given that we expect IHCL’s earnings to be strong due to a paucity of room supply, we believe a 50% premium to the Sensex multiple is reasonable at this time.
Key downside risks to our Hotel Leela target price are lower average room rates and occupancy rates, especially in Bangalore. Upside risks include increasing ARRs and improving ROE. Other industry-specific risks include significant rupee depreciation, which would be positive for Leela shares, and rupee appreciation, which would be negative. Key downside risks to achieving our target price for IHCL include any decline in average room rates and negative performance of the international business. Increasing average room rates and improving ROE could create upside risk. Other industry-specific risks include significant rupee depreciation, which would be positive for IHCL shares, and rupee appreciation, which would be negative.
source: MoneyControl.com
Hotel Leelaventure, which is expanding its footprint in India, plans to launch a mid-scale brand. With the planned budget brand, Hotel Leelaventure will join the league of five-star hotels such as the ITC Welcomgroup and The Taj group, which own mid-scale brands Fortune and Ginger, respectively.
“Currently we need to focus on the super-luxury segment. Once we saturate the five-star super luxury segment, we will definitely launch a budget brand immediately,” said Rajiv Kaul, senior vice-president The Leela Palaces & Resorts. The hospitality major is in the process of strengthening its brand in the super-luxury segment with five planned properties.
The expansion plans include sales and marketing offices in Frankfurt and the US. The hospitality major currently operates marketing offices in Dubai and London. Hotel Leelaventure has also signed a general sales agency agreement with a tour operator in Singapore to set up its sales & marketing arm next year.
Hotel Leelaventure has also revised its capex from Rs 1,200 crore announced last year to Rs 2,500 crore for its expansion plans over the next three years. However, this capex does not include the proposed hotels in Jaipur and Kolkata. Hotel Leelaventure recently won the bid by National Buildings Construction Corporation (NBCC) for a three acre plot in South Delhi for Rs 611 crore. It is planning to set up a 225-room hotel in Delhi, which is expected to become operational by 2010.
The expansion plan includes hotels in Gurgaon, Udaipur, Chennai, Hyderabad and Pune. Hotels in Gurgaon, Udaipur and Chennai will become operational next year and Hyderabad and Pune hotels will be launched in 2009. The hospitality major is also evaluating a convention centre near the Leela Palace, Kempinski in Bangalore.
source
Hotel Leela Venture, which presently owns 4 five-star properties in the country, is planning to expand abroad in the next 2-3 years.
The group has also opened offices in London, Dubai and New York to strengthen its international marketing and distribution network.
Know more>>
Nissan launched its luxury sedan 'Teana' and said it expects to sell 350 cars in the country this fiscal.
The company would deliver the first 20 units to Leela group of hotels.
Know more... click here
The six Global Hotel Alliance partners Kempinski, Omni, Pan Pacific, Dusit, Landis and Marco Polo have welcomed Leela Palaces, Hotels & Resorts as their seventh member.
GHA's CEO, Chris Hartley, says, "India is one of the largest and fastest emerging economies in the world today and will play a key role in the development of the global travel market in the years to come. Leela is poised to become the leading luxury hotel brand in India within the next few years, with coverage of all the major business and resort locations in the country, and thus Leela perfectly fits the role as GHA's regional member for India."
more..
Posts
All Comments
