Two key projects of the Hyatt hotel group, in Mumbai and Pune, have been put on hold by their developer, DB Hospitality, a sister concern of DB Realty, it is learnt.
While construction is yet to begin on the Park Hyatt in Mumbai, work has stopped mid-way at the Grand Hyatt, Pune. These are being developed by the DB group and the hotels were to be managed by Hyatt.
DB Realty is owned by Shahid Balwa, facing trial for being one of the accused in the telecom spectrum allocation scam.
"The developer is handling its economic situation and financial restructuring. So, there is nothing happening on these two projects," said Ratnesh Verma, senior vice-president, real estate and development, Hyatt Hotels.
DB Hospitality did not respond to the e-mail questionnaire sent to the company's public relations agency.
Earlier this year, the Grand Hyatt hotel in Goa, developed by DB Hospitality, faced allegations that the property was within 100 metres of the Coastal Regulation Zone, where no construction is allowed. Verma said his group had "patience" but it might need to soon discuss with its partner to "understand their intent and for reassessment of the contract".
He added: "Projects get delayed in India for various reasons. We support our developers as long as there is progress."
Chicago-based Hyatt recently signed a management agreement with IHHR Hospitality for rebranding five hotels in India.
The company has started the exercise and would open the five hotels by June 2013. Besides, the Hyatt has a pipeline of 50 hotels to be added in the next three years.
A challenge for the company in India is finding about 8,000 employees to operate its ambitious pipeline. It is in the process of recruiting around 1,000 people for the immediate expansion.
At present, it has 10 hotels across India. The group entered India in 1980 by setting up its first property in this city, the Hyatt Regency. Hyatt Hotels is going to open 23 of the Hyatt Place brand, 16 of Hyatt Regency and one Hyatt House by 2015.
It is going to launch Hyatt House and Hyatt Place outside the US market for the first time. It is also bringing Hyatt Andaz to India, with the first one coming up in the Delhi International Airport's hospitality district by 2014.
Hyatt is also in the process of renovating its hotels, to stay relevant for the modern consumer. While its first hotel, the Hyatt Regency, is undergoing its fourth major renovation, the company is also revamping its Grand Hyatt, Mumbai, property.
The upper middle segment is expected to drive the growth of the Hyatt group in Delhi.
"Our brands, Hyatt Place and Hyatt House, are the best places to cater to this segment. There is a clear supply gap in this space. The demographic we are catering to now is largely the domestic traveller, as against the earlier times when we were making luxury hotels for foreigners only," Verma added.