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As this is my inaugural address to the shareholders, I would like to thank the Board of Directors for placing their confidence in me as Chairman and Managing Director and in Dinesh Nair as Co–Chairman and Managing Director of the Company. I take this opportunity to acknowledge the yeoman services rendered by my father Capt. C. P. Krishnan Nair who has been the founder and driving force of the Company since inception. What started as his initiative and vision has today evolved into 8 award winning hotels and resorts across India and several more under implementation. We are honoured that he has graciously accepted the position as Chairman Emeritus and Founder Chairman and look forward to his continued guidance and inspiration.
Despite the challenging business environment, we were able to open Chennai's first sea–facing palace hotel, The Leela Palace Chennai. The326 room hotel with world class banqueting and meeting room facilities has been built to LEED Platinum certification and has since its opening been receiving encouraging comments and positive reviews. The Leela Palace Chennai is a luxurious experience, evoking the rich heritage of Chettinad architecture in terms of grandness and space. Facilities and guestrooms are world class with distinctive amenities and cutting edge technology. With Chennai booming as a commercial centre, it is our aim to make the hotel a natu ralchoice for discerning businessand leisure travellers, celebrities and dignitaries. The hotel was featured in the Hot List of Conde Nast Traveller (UK Edition) and in the 'It List 2013' of Travel + Leisure (US Edition)– premium lifestyle and travel magazines.
Change in Brand Identity
The year 2012 marked a milestone for the company as we celebrated not only our 25th anniversary but also unveiled a brand new identity for the brand including a revamped website and a new logo. Like every property we have designed, the new symbol in the form of an elegant monogram, is the work of a master Indian artist and is a clear reflection of who we are and what we offer our guests. Our universe is India and this is clearly reflected in our new signature. As we tread on the next chapter of our journey we hope to set a new global standard of service and believe that this symbol will become synonymous with the finest hospitality experience in India –experiences in settings that are the essence of India.
The Indian hospitality sector has been going through a difficult time owing to the economic downturn in Europe and US which has resulted in only a marginal increase of 2.8% in business and leisure travel to India. In addition, an oversupply of rooms across the country outpacing demand has impacted hotel occupancies placing pressure on average room rates. Weak business sentiment and global economic uncertainty may continue to be obstacles but I am convinced that it is a matter of time when the world economy rebounds and we must be prepared for the same. At the same time our resorts in Goa and Kerala catering to up market beach tourism continues to be buoyant. The India growth story too is not over. It still continues to be one of the fastest growing countries in the world and we expect that demand will come from a burgeoningdomestic market.
As we go about consolidating our position as a major luxury player in the hospitality business, we have begun charting out a new business strategy to exploit the full growth potential of our business. We will grow in an asset–light manner and plan to double our portfolio of hotels to sixteen hotels in the next five years through the management contract route. Our aim is to coverthe entire country by spreading our presence in the major metro areas before expanding our foot prints in the overseas markets. This will also enable us to offer our employees and business associates rewardinggrowth opportunities.
On behalf of the Board, I would like to acknowledge all my associates and colleagues in the company for their dedication and unstinting hard work in a difficult year and look forward to their continued support and their commitment to the future success of our business. I anticipate that the hospitality sector will continue to be difficult in 2013 but am confident that our new asset light business model, award winning service standards and excellent teamwork will indeed give us better opportunities when the upturn in the economy takes place.
I also take this opportunity to thank our valued shareholders, clients, bankers, financial institutions and government authorities for their confidence and support and lookforward to their continued support.
Chairman and Managing Director