Hilton expands in India as demand soars

Hilton expands in India as demand soars
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First Published: Thu, May 10 2007. 10 50 AM IST
Updated: Thu, May 10 2007. 10 50 AM IST
New Delhi: Hilton Hotels Corp. said it will invest as much as $143 million (Rs586 crore) over the next seven years in a joint venture with New Delhi-based DLF Ltd, part of giant Indian realty firm DLF Group, to help meet India’s surging demand for hotel and hospitality space.
The venture, DLF-Hilton Hotels, is 26%-owned by Hilton; the remainder is owned by DLF. It plans to develop 75 hotels and already has begun 10 projects in different parts of the country, including Bhubaneshwar, Kolkata, New Delhi, the technology hubs of Hyderabad and Bangalore and tourist hot spots such as Goa and Mysore.
India’s hospitality sector is booming amid brisk demand from business travelers, as well as foreign and domestic tourists. India has a total of 27,000 premium rooms in its 12 largest cities; the occupancy rate in these rooms was 75% in the year ended 31 March, a very high level for the industry overall, says Benaisar Jehani, an analyst at Crisil Research, a Mumbai-based corporate-research firm.
In March, 440,000 foreign tourists came to India, up 14% from a year earlier. The World Travel and Tourism Council forecasts that the travel industry in India will grow by 8% a year through 2016. The Investment Commission of India, a government body, forecasts the country will need a total of about 100,000 new hotel rooms over the next five years to meet the robust demand.
Both foreign and Indian hotel brands are rushing to meet that demand. Crisil expects Marriott International Inc. of the U.S. to open three new hotels. Four Seasons Hotels Inc. of Canada already has one hotel under construction in Mumbai and is looking at opportunities in Delhi, Hyderabad and Bangalore.
The U.S. hospitality group Carlson Cos. owner of hotel brands such as Radisson, Park Plaza, Park Inn, Country Inns & Suites and Regent -- recently acquired a 26% stake in Delhi-based Unitech Ltd. and will introduce the Regent hospitality brand in India. Indian hotel chains, including Claridges Hotel Pvt. Ltd. of New Delhi and East Indian Hotels Ltd. of New Delhi, are expanding.
The new DLF-Hilton venture will focus primarily on midrange hotels. Hilton already has a sizable presence in premium hotels in India through the eight Trident Hilton hotels that it manages under an alliance with East Indian Hotels.
”India is huge, and the opportunity is not only in the upscale segment,” said Ian Carter, executive vice president of Hilton’s international operations. ”India is one of the 10 markets that we will focus on. Over the next seven to 10 years, our presence in India will grow tenfold.”
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First Published: Thu, May 10 2007. 10 50 AM IST
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