Tata’s hotel arm, The Indian Hotels Company, would open its first hotel in Cape Town at the end of the year, followed by hotels in Johannesburg and Durban.

The R500-million (€44-million) 176-room Taj Palace Hotel, built in partnership with Irish-owned development company Eurocape in Cape Town’s CBD, would incorporate the facades and many original features of two 19th century buildings in an attempt to maintain the integrity and feel of the area.

The hotel’s general manager, Michael Pownall believes that “tourism, which is already South Africa’s biggest earner of foreign exchange, will become this country’s main industry and biggest employer.”

The Tata Group has already made significant investments in Africa’s biggest economy, in particular in the areas of telecommunications, steel and the motor industry. Pownall said that Taj was moving into South Africa to ensure it was ready to benefit from the “exponential growth” that was expected to follow the 2010 World Cup.

Taj had already indentified the site for its Johannesburg hotel. The hotel would be located in a mixed development called Melrose Arch. However, the hotel group was still searching for a site to set up a hotel in Durban.

Pownall added that Taj would start its own hotel school to ensure supply of qualified staff and that recruiting of more than 300 staff was already underway.