Indian Hotels Company Limited (IHCL) is a name that has become synonymous with grandeur, luxury and service. Starting with a minuscule capacity of 240 room three decades ago, the company has grown into a powerful monolith and operates 37 hotels in India and 16 abroad. IHCL has a presence in every segment. Its hotels have been grouped into various segments, namely luxury, business, leisure and international.

Apart from having the largest chain of hotels, its competitive edge stems from well-positioned properties in the business districts of Mumbai and Delhi. It also has prime properties in key cities like London, New York, Washington, DC, Chicago, the Middle East and Africa. IHCL's revenues have dwindled on account of a fall in business and tourist arrivals. However, the company is undergoing a restructuring exercise, which is expected to yield good results. The long-term prospects of this company appear satisfactory.

EIH Limited is one of leading companies in the hotel industry. The company's name was changed to EIH from East India Hotels to enhance its offshore image. EIH has become synonymous with class and style. The company has come a long way and is now one of the most recognised names in the industry. EIH owns and operates the Oberoi chain of hotels in India and abroad. EIH's operating margins, like many hotel companies, have been declining in the last two years.

EIH derives a major chunk of its revenues from its Mumbai and Delhi properties. The company's operating income is highly dependent on the business traveller segment, which fluctuates with the economic and investment climate in the country. In order to mitigate this impact, the company has decided to construct medium-priced hotels in smaller cities and towns like Pune. Considering the efforts initiated by the company to excel in the industry, EIH presents bright future prospects.

Hotel Leela Venture (HLV), a prominent player in the luxury hotel industry, runs two properties, namely the Leela (near the international airport at Mumbai) and the Leela Beach, Goa. Its luxury hotel in north Mumbai contributes significantly to the groups income. Being close to the Sahar airport, it caters mainly to foreign business guests. The awards won by the Leela group of hotels over a number of years bear testimony to its outstanding performance in the hotel industry.

The hotel, which is recognised for its contribution to the Indian tourism and hospitality industry, has planned to set up a string of corporate hotels in the metros, starting with Mumbai. In fact, HLV is already working towards this direction; it has tied up with the Canada-based Four Seasons group of hotels that will provide the Leela with its expertise. The hotel even has very ambitious expansion plans that include setting up properties in cities other than its existing locations. This will involve an investment of a huge amount over the next couple of years, and financing the same will require substantial equity dilution. Poor performance clocked by the hotel and tourism industry over the past many years is reflected in the lacklustre bottomline of the existing companies in the industry.

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