Business
Indian Hotels takes on management of Dubai property http://www.ndtvprofit.com/homepage/news.asp?id=243680
April 5, 2006
MUMBAI (Reuters) - Indian Hotels Co. Ltd. has signed a 10-year management contract with Dubai-based property developer ETA Star for a luxury hotel and residential apartment complex in Dubai, officials from both companies said.
Indian Hotels' luxury Taj Hotels brand will operate and manage the Taj Exotica resort and spa and the Grandeur Residences located at the Palm Jumeirah Crescent in Dubai, as it seeks to expand its presence in fast-growing international markets.
"We've said we want to grow our presence outside of India, and Dubai is an important location, which gives Taj a presence in one of the most dynamic markets," Indian Hotels Chief Executive Raymond Bickson told a news conference on Wednesday.
ETA Star will develop the $330-million project, which will comprise a luxury hotel and 200 luxury residential apartments for sale and lease, overlooking the famed man-made Palm island. The property will be operational in the first quarter of 2006.
The apartments will be priced from $520,000 for a one-bedroom unit to $3.5 million for a four-bedroom villa. Hotel rooms are likely to be priced at between $350 and $500, Bickson said.
The management contract may be renewed after a period of 10 years and Indian Hotels and ETA Star will examine the possibility of other similar agreements, Bickson said.
"Everywhere, we are looking at a combination of joint venture deals, equity partnerships and management arrangements, as these give us access to more distribution channels," said Bickson.
Bickson declined to disclose the financial terms of this agreement, but said Indian Hotels would like one-third of its total revenues to come from its international operations over the next five years, up from 22 percent now.
Indian Hotels, a part of the Tata Group, has 18 overseas hotels and operates luxury residences in Mumbai and London.
Indian Hotels last month signed a marketing alliance with Korea's Shilla Hotels, similar to the one it has with Singapore's Raffles Hotel. Last July, it took over the lease of New York's Pierre Hotel for a period of 30 years.
It also bought W Hotel in Australia last December for $27 million.
"Mixed-use developments and luxury residences are the trend today for developers and hoteliers, and we expect it to continue," Bickson said.