Indian retail giant, Pantaloon, which has renamed itself as the Future Group, is "planning a foray into hospitality, with hotels targeting Indian leisure and business travellers," says Samir Sain, CEO of Pantaloon's financial services arm, Future Capital, in an interview carried on the Asian Investor web site, FinanceAsia.com.

"There is a large opportunity for hotels in the three- and four-star price range," says Sain. "We fundamentally believe that there is a severe gap in the market for hotels built to suit the modern-day Indian traveller. Most hotels that are built/are being built are typically five-star, or end up being priced as one, simply because land is so expensive. Further - and contrary to the commonly held belief - a lot of food and beverage within a hotel can drag down the operating margins and lead to space wastage."

Sain says the Future Group, through its Horizon and Kshitij funds, will "initially commit or deploy US$250-300 million to build 20-25 hotels within two years."

In the interview, Sain says: "Our model will be to focus on limited service and design-led hotels that will primarily be part of mixed-use developments and, wherever possible, will be attached to malls. We can provide shared services such as restaurants, parking and health clubs, which are typically part of the mall and therefore maximise our productivity and space realisation. The top floor of a mall typically gets the lowest rents whereas it is the inverse in a hotel. We can use this to our advantage.

"Finally, this initiative will be led by Shishir Baijal, CEO and Managing Director of our real estate business . . Shishir is a veteran hotelier with over 18 years of experience in the sector, including a long career at one of India's leading hotel chains. Combining his experience with the embedded talent in his . team, we believe we will be able to successfully execute this business."

For the complete interview, go to http://www.financeasia.com