Singapore: Hilton Hotels Corp., the second-largest US provider of rooms, and joint venture partner DLF Ltd, will spend about $1.5 Billion to acquire land and build 50 to 75 hotels in India, said Koos Klein, Hilton’s Asia-Pacific president.
“We feel very comfortable” about achieving the goal in five to seven years, Klein said in an interview in Singapore today.
Hilton, based in Beverly Hills, California, will invest $143 million building the properties. DLF, a real estate company owned by billionaire Kushal Pal Singh, will control 74% of the venture. New Delhi-based DLF received regulatory approval this week to sell at least $2.1 billion of shares.
The fastest pace of economic expansion in two decades is drawing more business travelers to Asia’s fourth-largest economy. Tourism may expand at a rate of 8.8% a year in the next decade, behind only Montenegro and China, according to the London- based World Travel & Tourism Council.
Hilton joins companies such as Accor SA and EasyHotel Ltd. in entering India, where demand for accommodation at key business and leisure destinations is expected to increase at a compounded annual growth rate of 10% in the next five years, according to CRISIL Research, unit of a credit-rating company.
Hilton’s average revenue per room in the Asia-Pacific region grew about 15% in the first three months of this year, Klein said.
The development of the first few hotels will be financed with equity from the joint venture, Hilton said in an e-mail. “It is not likely that the joint venture will use a lot of debt building, if any, in the first stage of development.”
Hilton said on 28 November 2006 it will build its Hilton Hotels and Hilton Garden Inn brand in India, a move made possible by its $5.7 billion purchase of U.K.-based Hilton Group. The venture will initially build 20 hotels in cities including Chandigarh, Chennai, and Kolkata to cater to business travelers, it said.
—With reporting by Liza Lin in Singapore and Ashok Bhattacharjee in New Delhi