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Thursday, March 17, 2011

Hilton set to upstage leader Starwood in Delhi market

This story first appeared in DNA Money edition on Thursday, March 17, 2011.

Hilton Worldwide is set to unsettle global hospitality major Starwood Hotels & Resorts from the number one position in the New Delhi hospitality market.

With five properties in the five-star deluxe and luxury segment under Le Meridien, Luxury Collection, Sheraton and Westin brands, Starwood currently is the largest international hotel chain operating in the Delhi/National Capital Region market. Hilton, which currently runs two hotels in Delhi (Hilton Jankapuri and Hilton Garden Inn Saket), is set to add three projects to its portfolio in calendar year 2011.

Its DoubleTree by Hilton and Garden Inn properties are expected to open in Gurgaon in the second half of 2011. Also, another property under development in Gurgaon would be managed by Hilton.

This apart, Hilton is in talks for management contracts for three more hotels, including two under development, with New Delhi-based realtor Eros group. These hotels (of Eros) will get onstream in the next 18-24 months, taking the overall portfolio to Hilton to eight in the Delhi / NCR hospitality market alone.

“The Hilton management is in the final stages of signing management contracts for realtor Eros Group’s three projects in New Delhi and the deal is likely to get through,” said the source.

Eros Group has a 214-key five-star deluxe hotel currently managed by InterContinental Hotels Group (IHG) under its InterContinental brand in addition to two developments, InterContinental and Holiday Inn, coming up at Mayur Vihar.

This entire portfolio is likely to undergo a rebranding exercise wherein Hilton Worldwide is expected to take over management control post the early termination of agreement between Eros and IHG.

Rajesh Punjabi, vice-president-development, India, Hilton, said, “As part of our ongoing development efforts, we speak to a number of developers and owners. For reasons of confidentiality we are not able to provide any of the details. We would also like to confirm that the Nehru Place and Mayur Vihar hotels stated in your query are not part of our pipeline.”

Industry sources, however, said Eros and Hilton were in an advanced stage of negotiations and were fine-tuning the management agreements.

Officials at InterContinental Eros Nehru Place did not comment.

When concluded, this development will mark resurgence of Hilton’s presence in the Indian hospitality market especially after its association with PRS Oberoi-promoted East India Hotels fell through. This development saw a wipe-out of Hilton branded hotels in the Indian market until Hilton Janakpuri and Hilton Garden Inn Saket opened doors in 2009-10.

While asset owners of the DoubleTree by Hilton are not known yet, the Hilton Garden Inn, Gurgaon is owned by DLF and is part of the Hilton-DLF joint venture pipeline that is expected to see a rollout of four projects. DLF also owns the operational Hilton Garden Inn at Saket which is Hilton’s first hotel in India under that brand.

The 440-room hotel-cum-convention centre in Gurgaon currently under development is owned by the Piccadilly Group (owners of the Hilton hotel at Janakpuri) and will be operated by Hilton.

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