Sarovar to Sign 8-Hotel Deal with Phoenix JV

June 20, 2008	(Be the first to rate this story!)  Loading ...
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After its five-hotel deal with Vipul Hospitality late last year, Sarovar Hotels & Resorts is now in the process of finalizing a brand new eight-hotel deal with the JV Company of Phoenix Hospitality and Entertainment World Developers (EWDPL).

The eight hotels, says Sarovar Hotels & Resorts executive director Ajay Bakaya, will be set up at tier-II locations of Raipur, Udaipur, Nanded, Jabalpur, Chandigarh, Indore, Ujjain and Bhilai. At many of these places, the plan is to have malls-cum-hotels for which development and construction is already underway.

These eight new hotels will add anywhere between 1,000-1,100 rooms to Phoenix’s hospitality portfolio. Going by an average of Rs 30 lakh a room as development cost, the total cost of these eight hotels could be around Rs 300 crore, excluding the cost of land, says an industry source.

Sarovar Hotels & Resorts will manage, market and provide reservation systems for these properties across India for 15-20 years, It would also guide in the design process, says Mr Bakaya. Phoenix, on its part, has the option to choose from Sarovar’s portfolio of Premier, Portico and Hometel brands for these hotels as well as the Park Plaza and Park Inn brands that Sarovar represents in India.

Many of these locations do not have any quality hotels and with these properties, Sarovar and Phoenix would gain a first-mover advantage in these markets. The average room rates that can be expected in these locations is in the Rs 2,000-3,500 range. Since Sarovar itself has an aggressive expansion plan across India, the two are likely to have a non-compete agreement within the same brand (within a 2-3 km radius) in the city.

Apart from the proposed hotels, Phoenix Hospitality, the hospitality arm of Phoenix Mills, is developing nearly 14 hotels across the country. Phoenix has tied up with Hong Kong-based Shangri-La to manage its hotel property in Lower Parel in Mumbai (which opens in 2009) and has also tied up with the Hyatt Group and US-based Marriott International to manage its other hotel properties.

Phoenix, which had picked up a 42% stake earlier in EWDPL, a mall developer based in Indore, was reported earlier this month as planning to raise nearly $450 million (nearly Rs 1,890 crore) from private equity investors to fund its mall and hospitality projects. The company is planning to raise $200 million to fund its retail plans while the $250 million would fund its hospitality projects.

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

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