An edited version of this story first appeared in DNA Money edition on Saturday, October 06, 2012.
New Delhi-based Carnation Hotels is in discussions with international luxury hotel brands exploring a possible joint venture for their India operations. Once concluded, Carnation will be responsible for managing the day-to-day affairs of these luxury hotels based on the brand owner's global service / quality standards.
Confirming the development, Rattan Keswani, co-promoter and managing director, Carnation Hotels, said, "Two international luxury brands wish to engage our company as a joint venture (JV) partner to operate their hotels in the region." He did not share names as the discussions were still on with the foreign hotel brands.
A newly instituted hotel management company, Carnation Hotels (P) Ltd is co-promoted by Rattan Keswani, the erstwhile president of Trident Hotels (Oberoi Group) with Patu Keswani's Lemon Tree Hotels as majority shareholder.
The company was set up as part of Lemon Tree's business restructuring exercise to separate hotel asset ownership and management. To this effect, Carnation will now manage hotels with either Lemon Tree brands i.e. Lemon Tree Premier, Lemon Tree or Red Fox provided the hotels fit the brand architecture and efficiencies or under separate brands.
"For hotels that don’t fit in, we are creating a new brand portfolio for the upscale and mid-scale segments. We shall be able to share details of the new brands in about a month more," said Keswani.
Operational for almost a quarter now, Carnation recently signed its first management contract for a resort in Himachal Pradesh. The company is in active negotiations with 10 other owners / projects for management contracts. "We signed our first resort last week and hope to close two more in the next fortnight. We hope to have over 2,500 rooms under management within the next 18 months. The overall plan is to manage over 4,000 guest rooms by 2015," said Keswani adding the company would consider taking equity positions (with asset owning companies) on a case to case basis.
Supported by the bandwidth of Lemon Tree's corporate structure, Carnation has also got on board hospitality professionals from across functions having experience with hotels chains like Four Seasons, Alila, Taj , Starwood, InterContinental and Marriott . "They will assist and manage the hotels within the brands assigned. And should the luxury brand JVs fructify, we shall enhance the team as needed," said Keswani.
The common structure supporting Carnation Hotels is expected to undergo some change as expansion happens in the coming years. While the present structure can support an addition of up to 1,000 guest rooms under management, the company foresees senior executives moving into leadership roles after new brands are structured.
On what differentiates Carnation's approach to hotels business vis-a-vis existing domestic and international players already operating in the country, Keswani said, the company will bring the best expertise between luxury and mid-scale under one roof-with professionals who have successfully delivered in India.
"The Indian customer shall be our focus different from other international and domestic players. We will leverage expertise to relate luxury with economies/efficiencies thereby delivering the best return on capital employed (ROCE). We build better, quicker and cheaper with better ROCEs than our competitors. We have done that for owned hotels under the various Lemon Tree brands and should be able to deliver similar results for other owners as well," he said.
New Delhi-based Carnation Hotels is in discussions with international luxury hotel brands exploring a possible joint venture for their India operations. Once concluded, Carnation will be responsible for managing the day-to-day affairs of these luxury hotels based on the brand owner's global service / quality standards.
Confirming the development, Rattan Keswani, co-promoter and managing director, Carnation Hotels, said, "Two international luxury brands wish to engage our company as a joint venture (JV) partner to operate their hotels in the region." He did not share names as the discussions were still on with the foreign hotel brands.
A newly instituted hotel management company, Carnation Hotels (P) Ltd is co-promoted by Rattan Keswani, the erstwhile president of Trident Hotels (Oberoi Group) with Patu Keswani's Lemon Tree Hotels as majority shareholder.
The company was set up as part of Lemon Tree's business restructuring exercise to separate hotel asset ownership and management. To this effect, Carnation will now manage hotels with either Lemon Tree brands i.e. Lemon Tree Premier, Lemon Tree or Red Fox provided the hotels fit the brand architecture and efficiencies or under separate brands.
"For hotels that don’t fit in, we are creating a new brand portfolio for the upscale and mid-scale segments. We shall be able to share details of the new brands in about a month more," said Keswani.
Operational for almost a quarter now, Carnation recently signed its first management contract for a resort in Himachal Pradesh. The company is in active negotiations with 10 other owners / projects for management contracts. "We signed our first resort last week and hope to close two more in the next fortnight. We hope to have over 2,500 rooms under management within the next 18 months. The overall plan is to manage over 4,000 guest rooms by 2015," said Keswani adding the company would consider taking equity positions (with asset owning companies) on a case to case basis.
Supported by the bandwidth of Lemon Tree's corporate structure, Carnation has also got on board hospitality professionals from across functions having experience with hotels chains like Four Seasons, Alila, Taj , Starwood, InterContinental and Marriott . "They will assist and manage the hotels within the brands assigned. And should the luxury brand JVs fructify, we shall enhance the team as needed," said Keswani.
The common structure supporting Carnation Hotels is expected to undergo some change as expansion happens in the coming years. While the present structure can support an addition of up to 1,000 guest rooms under management, the company foresees senior executives moving into leadership roles after new brands are structured.
On what differentiates Carnation's approach to hotels business vis-a-vis existing domestic and international players already operating in the country, Keswani said, the company will bring the best expertise between luxury and mid-scale under one roof-with professionals who have successfully delivered in India.
"The Indian customer shall be our focus different from other international and domestic players. We will leverage expertise to relate luxury with economies/efficiencies thereby delivering the best return on capital employed (ROCE). We build better, quicker and cheaper with better ROCEs than our competitors. We have done that for owned hotels under the various Lemon Tree brands and should be able to deliver similar results for other owners as well," he said.
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