New Delhi: Hospitality firm Hilton Hotels Corp. has sought clearance from the Foreign Investment Promotion Board (FIPB) to bring all its brands to India and operate with firms other than DLF Ltd.
In 2007, property developer DLF and Hilton had forged a 74:26 joint venture to own and manage 50-75 properties under the Hilton and Hilton Garden Inn brands. Hilton’s other brands include Doubletree by Hilton, Hampton by Hilton and Homewood Suites.
Hilton has also proposed a substantial hike in its fees by DLF as well as its other potential partners, which is a blanket upper limit, Hilton officials said, requesting anonymity.
Last year DLF vice-chairman Rajiv Singh had said the development of hotels with Hilton had been deferred by 12-18 months as a result of the credit squeeze. DLF officials said its joint venture with Hilton will build four hotels under the Hilton brand name. Another 16 hotels will be developed by DLF but managed by Hilton under the Garden Inn brand, said the officials who didn’t want to be named.
These officials from both the firms said the proposed hike in fee will not be applicable to the 20 hotel deals already closed by the two companies. DLF officials said the contract with Hilton for the 16 Garden Inn hotels had been extended by one year in March, and if construction of these hotels is not started by March 2010, the fee to Hilton could be hiked marginally.
In its FIPB application, Hilton said for hotels managed by it for DLF or any other firm, the trademark licence fee will be increased from the current 2% of revenues to a maximum 3%. It has also introduced an operating fee of up to 10% of gross operating profits, increased international marketing fee from 1% of revenues to 3% and incorporated a development fee of $350,000.