IHC to spend $1 bn on buying Hotels

June 13, 2008	(1 votes, average: 4 out of 5)  Loading ...
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Indian Hospitality Corporation (IHC), a joint venture of Gordon House Hotels, Mars Restaurant and SkyGourmet Catering formed last year, plans to spend as much as $1 billion to acquire hotel groups and restaurant chains.

The company has hired Ravi Deol as chairman and chief executive of Mars Restaurants, the hotel and food services division of IHC, to initate acquisitions. Deol is the former managing director of Barista and ex-chief executive of FieldFresh Foods.

“We are looking to add 2,000 hotel rooms across 17 cities, including metros and towns such as Lucknow, Amrtisar, Raipur, Chandigarh among others. We may acquire hotel groups having 5-7 properties. We are also looking at acquiring restaurants or restaurant chains and then take them to the leadership position,” Deol told Business Standard.

All these acquisitions will be done by Mars Restaurant. “We may go for a rebranding of an existing hotel chain as and when we acquire them,” Deol said.

IHC has formed a $200-million ‘hospitality opportunity fund’ and $220 million worth of warrants to be converted into equity. The balance amount will be raised by selling equity or through borrowings, IHC executives said.

Mars Restaurants has brands Such as Tendulkars’ (a 50:50 joint venture with cricketer Sachin Tendulkar), China Joe, The Pizzeria, Dosa Diner among others, while Gordon House is a venture of Mars Restaurants and currently has three properties in Mumbai and Pune. The acquisitions will add to the portfolio of Gordon House hotels.

The Indian leisure and hospitality industry is set for high growth, according to the World Travel and Tourism Council. According to industry estimates, the Indian hotel and hospitality industry generates foreign exchange earnings of Rs 35,000 crore each year in addition to Rs 10,000-12,000 crore generated from Indian customers.

The market size of branded fast-food and dine-in restaurants is estimated at over Rs 600 crore. This segment is grwoing in double digits annually attracting players like IHC, industry experts said.

According to sources, popular north Indian restaurant chain Nirulas along with Clarks hotel chain may be on the radar of IHC for acquisition and subsequent re-branding.

On the air-catering front, IHC is looking to expand SkyGourmet to 11 cities from six metros at present. SkyGourment will soon set up its air catering facilities in Kochi, Jaipur and Amritsar among other cities.

“We will also expand our air catering services globally when Kingfisher goes international. We are already catering for Jet Airways, Kingfisher Airlines, Air India Express, Indian Airlines, Malaysian Airlines and Air France. We are looking at providing catering to Emirates and Lufthansa too,” Deol said. SkyGourmet was incorporated in 2002 and is headquartered in Mumbai and employs about 1,150 people.

News Published Under:   Real Estate India, Hotel Industry in India |

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