Mumbai, Tuesday, November 28, 2006
Accor picks 40% stake in Sofitel project
Contrastingly, Hilton gets to fly flag free following Trident deal
It's all about location, location and location.
And if it is in the prestigious Bandra-Kurla Complex (BKC), it's a location you had better invested to see your hotel flag flying.
But this story is about how two premium brands went for presence in divergent ways - one got a property free, figuratively speaking, due to a marketing arrangement, the other paid $16 million for a 40% stake in a property coming up at BKC.
The properties, the Trident-Hilton and the Accor Sofitel, literally face off at the BKC. By signing a marketing arrangement with Oberoi, Hilton got its flag flying on the prestigious Trident property.
However, to be in the same location and to edge out other international rivals, French major Accor SA had to pay Rs 71 crore to Shree Naman Hotels Pvt Ltd, the hospitality arm of real estate firm, Naman Developers. Earlier this year, the realty company acquired a two-acre plot at Bandra-Kurla Complex for Rs 204 crore from the Mumbai Metropolitan Region Development Authority.
Michael Issenberg, Asia Pacific president of Accor SA, said, "The location was just right and we didn't intend to lose in on the opportunity. Thus, going for equity participation looked like a step in the right direction." Issenberg was in Mumbai to participate in the bhoomi pujan ceremony of the upcoming Sofitel hotel at BKC, which will feature 311 rooms and will be ready to receive guests by 2009. The total investment on the hotel project is estimated to be around Rs 475 crore.
Jayesh Shah, MD, Naman Developers,said of this, Rs 200 crore will be infused jointly by Naman Hotels and Accor SA. "We will use debt financing to finance the balance." Shah said Naman will be setting up more hotels in the future, possibly with Accor. Issenberg said Accor has signed management of two Sofitel hotels with Nirmal Group and another beach front spa property has been signed in Goa.
"We also have half-a-dozen Ibis hotels under construction in Mumbai, Pune, Gurgaon, Jaipur, Bangalore and Hyderabad. These properties will add approximately 1,200 rooms and a total cost of Rs 350 crore," he said. Issenberg also informed that discussion on another three Ibis hotel sites in Mumbai, Ahmedabad and Bangalore are in the final stages.
Other cities being identified for Ibis include Chennai, Kolkata, Kochi, Surat and Chandigarh. All hotels will be developed through a joint venture, InterGlobe Hotels Pvt Ltd. By the end of 2007, InterGlobe Hotels expects to have 15 Ibis hotels under development, with 2700 rooms and a total investment of Rs 805 crore.
While Accor manages the Novotel hotel adjacent to the international convention centre in Hyderabad another three Novotel hotels are being developed in Gurgaon, Bangalore and Hyderabad.
All of them are under management contract. In fact, in Bangalore the Ibis and Novotel hotels are located just next to each other.