Tuesday, November 20, 2007

St Regis in talks to check in with Reliance-ADAG

The Reliance-Anil Dhirubhai Ambani Group (R-ADAG) is understood to be in talks with the New York-based Starwood Hotels & Resorts, a leading hotel and leisure company, to launch its upscale St Regis brand in the country. Sources indicate that the talks have reached an advanced stage and the announcement will be made soon.
While company officials declined comment, it is learnt that R-ADAG and Starwood may jointly float a special purpose vehicle (SPV), in which the former will hold a majority stake. Reliance Land, a group company that holds 51% stake in Adlabs, would provide the land for the business, which will translate into equity. It is likely that the SPV may launch new brands for the hospitality business in India, said sources close to the development.
Reliance Land is believed to be in talks with local land developers to acquire properties in Delhi, Mumbai, Hyderabad and Bangalore. But company officials declined to comment on any development. The company plans to use the unused property of Adlabs for setting up hotel projects, sources said.
A Starwood official said: “Nothing has been confirmed at this stage’ We are looking to grow our presence and brands in India and will definitely make the announcement at the right time.” Thomas J Monahan, senior vice-president, acquisitions and development, Starwood Asia Pacific Hotels & Resorts, during a recent visit to India had stated that the group has been looking at various opportunities to invest in India and talking to existing hotel companies to launch its various brands.
Starwood, which has been operating in India through its brands Sheraton and Le Méridien recently announced that it would bring its Westin brand in Sohna in India in December this year. ITC recently snapped ties with the Sheraton brand and launched the upmarket Luxury Collection brand and converted seven Sheraton properties into the “Luxury Collection” brand. ITC has been Starwood’s partner in India for the past 30 years.
Taking a cue from global trends, the domestic hotel industry is increasingly opting for pure management contracts with real estate developers for running hotels, rather than locking investments in properties. Rising real estate prices have made management deals more viable for companies than owning properties.
Starwood operates approximately 890 properties in more than 100 countries. This fully-integrated owner, operator and franchiser of hotels and resorts has nine brands in its portfolio, that including St. Regis, The Luxury Collection, W, Westin, Le Méridien, Sheraton, Four Points by Sheraton, Aloft, and Element. Starwood Hotels also owns Starwood Vacation Ownership Inc, one of the premier developers and operators of high-quality vacation interval ownership resorts.
The New York-based company has outlined an aggressive growth strategy for India, which is facing a huge demand-supply mismatch in room supply. The group plans to double the number of properties in India from the current 19 in five years and introduce more brands. With the travel and tourism industry expected to show double-digit growth rate, Starwood wants to take advantage of the booming markets in India, industry sources said.


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