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Third time lucky? Hilton links up again for projects

Our Corporate Bureau in New Delhi

The United Kingdom-based Hilton International has finalised its third foray into the Indian market.

It has formed a joint venture holding company, called Hospitality Holdings India Ltd, with the Arun Suri-promoted Blue Coast Hotels and Resorts Ltd, formerly known as Morepen Hotels.

While Hilton has picked up one-third equity in the holding company, the rest is owned by Suris.

The new company will build new hotel projects at Bangalore, Goa and Mumbai with an investment of about Rs 500 crore (Rs 5 billion). These projects are expected to be operational by 2005.

"Hilton International has a long-term commitment to a presence in India. We are following a two-pronged strategy which includes anchoring our presence with a strong local partner and participating in the equity of our hotels," Koos Klien, president, Hilton International (west Asia & Asia Pacific), said.

The new holding company will now enter into independent tie-ups with local partners for each location.

While the holding company plans to have a majority stake in each of the hotels, it will not be more than 74 per cent, Klien added.

He added that while the nitty-gritties are still being worked out, the debt-equity ratios in the projects is going to be about 1:1. He, however, refused to divulge the name of the partners at the three locations.

This tie-up is, however, not exclusive to any of the two partners. Blue Coast Hotels has a Park Hyatt property at Goa and Hilton is free to join hands with any other partner 'in case it is impossible to involve Blue Coast,' Klien added.

The international chain had earlier signed memoranda of understanding with the Sanjay Narang-promoted Maars Restaurant in Mumbai and the Raj Gehlot-promoted Ambience Lagoon in Gurgaon near New Delhi.

While the Mumbai tie-up might crystallise, the Delhi deal is likely to fall through. Sources say that the company is talking to the Vijay Mallya-promoted United Breweries for its hotel project in Bangalore.

As a part of its first phase, Hospitality Holdings will develop a 175-unit Hilton Residences (consisting of service apartments) and Country Club in Mumbai, a 250-room Hilton hotel in Bangalore and a 160-room Hilton resort in Goa.

"The negotiations with all the three partners are in a final stage and the final agreement is likely to be signed in the near future," Arun Suri, chairman and managing director, Blue Coast Hotels & Resorts Ltd said.

Hilton had earlier tied-up with the Lalit Suri promoted Bharat Hotels for his New Delhi property and later with Sanjay Khan-promoted Golden Palms resort near Bangalore. Both the tie-ups, however, did not last for a long time.

The current strategy is a part of the multinational's chain to expand rapidly in the middle-east and the Asia Pacific market. Hilton plans to build 16 hotels in the region within the next 2-3 years.

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