Indian hotel chain aims to expand brand into fitness centres

Rajeev Reddy, a 55-year-old businessman from India, skydived 13,500 feet in Dubai last year to promote his brand Country Club and Dubai as an adventure tourism destination for Indian visitors. The chairman of the India-based chain of holiday homes is eyeing expansion.

What are your plans in the Arabian Gulf?

Since we bought Chelsea Hotel in Dubai in 2008 for Dh165 million (US$44.9m), the market has changed a lot. It is our only property, which we renamed the Country Club, here currently. We want to set up fitness centres in Abu Dhabi, Dubai, Damman, Riyadh and Jeddah in the next six months. In two years, we can invest around Dh200m in the Gulf. In the next one year, we want to open 10 fitness centres in the UAE. Our current membership base is 325,000, including around 15,000 from the UAE.

Why fitness centres?

Our brand is based on membership. And we think fitness centres can push the brand. People can take a 30-year membership from 1 lakh rupees (Dh6,660) to 3.5 lakh rupees with 10,000 rupees as an annual subscription charge. And they will get access to the club services, a week's free stay at any of our hotels or partner hotels and free access to events. Non-members would come, too. We have affiliated with RCI [a vacation-exchange company] and their 4,000 hotels.

Country Club listed on the Bombay Stock Exchange in 1995, six years after it started. Why?

To raise money for Amrutha Castle hotel in Hyderabad, India. We raised about 3 crore [30 million] rupees. Also, as a public company, we can raise money through loans from foreign banks and equity. In India, bank loan interests are very high at around 15 per cent.

You are scouting for properties in London, New York and Kenya, among other places. How do you choose the locations?

Real estate is down everywhere and we want to leverage this. Most of our properties are takeovers. When we bought the Bandipur property in Karnataka [in 2004], no one was going for it because of the scare from Veerappan [sandalwood smuggler]. But a few days after we bought it, Veerappan was shot dead, and we added 100 rooms gradually. Same for our property in Kandy, Sri Lanka. Because of the LTTE [Liberation Tigers of Tamil Eelam] problem, the property prices were down and we kept a skeleton staff. Now the security situation is OK and we are gradually opening it up. We are operating 20 rooms out of 50 and going at 60 per cent occupancy rate.

Country Club, which made a profit of 50 crore rupees in the year ending September 2012, up by 15 to 20 per cent from the previous year, has received mixed reviews online for hotel amenities and membership services. How are you trying to improve your reputation?

In the last two years, we have undergone a change in terms of customer-care service, which is now centralised. Now we monitor Web reviews and someone from customer service gets back immediately.

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