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Sunday, September 8, 2013

Starwood, Marriott in race for Phoenix's Mumbai hotel

This story first appeared in DNA Money edition on Thursday, Aug 29, 2013.

While Phoenix Mills, the promoters of erstwhile Shangri-La hotel in Mumbai, have renamed the property Palladium Hotel for now, it is understood that the asset owners are in talks with global hospitality majors for a new management contract.

Global hospitality majors, including Starwood, Marriott and Hyatt, are said to be engaged in hectic negotiations with the asset owner, Pallazzio Hotels and Leisure, a unit of Phoenix Mills.

The current operator, Hong Kong-based Shangri-La Hotels & Resorts, handed over the hotel to Pallazzio on September 6, 2013. Earlier this week, Pallazzio and Shangri-La decided to mutually terminate the 20-year management contract after operating the luxury hotel for nine months.

Shishir Shrivastava, Group CEO and joint managing director, PML, did not respond to a query on the new international hotel operator/brand.

Industry sources said Starwood is a strong contender for the new management contract. Marriott and Hyatt are equally aggressive pursuing the matter, said one of the sources.

“These chains certainly are front-runners but then the hotel owners could be practically speaking to every possible operator,” the source said.

The current discussions with the asset owner are an indicator that a new hotel operator is yet to be finalised as against PML’s claims of already having someone on board.

Officials at both Starwood Hotels & Resorts and Marriott International said they were not in a position to comment.

Responding to a dna email, a Hyatt International spokesperson said, “The company is not in the race for the management contract at this time.”

There’s also some buzz that the hotel in question will join Starwood’s ‘Westin’ network. Interestingly, Pune-based Avinash Bhosle Group owns a 27% stake in PML’s Mumbai hotel and already has Starwood as the operator for its five-star hotel in Pune under the Westin brand. Its another upcoming property in Goa will also be managed by Starwood under the ‘W’ brand.

PML will have to take a final call on the new operator at the earliest.

This is because the Indian hospitality industry is set to enter the peak business season starting October and not having a hotel operator will make it very challenging for the asset owners.

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