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Hilton to raise India hotel count to 50

January 15, 2009 10:29 IST

The Hilton family of hotels will have 50 hotels in India by 2015. Twenty of these hotels are in various stages of development, with three (in Delhi, Chennai and Bangalore) slated to open in 2009, a senior Hilton executive said in Mumbai.

These will be business and mid-market hotels that will sport brands such as Hilton, Hilton Garden Inn and Homewood Suites by Hilton (a long stay product). 

"We continue to be upbeat on India, which offers huge potential due to its low penetration and the combination of growth in travel and disposable incomes,'' said Martin Rinck, president Asia Pacific, Hilton Hotels Corporation.

Hilton estimates that India has around 120,000 rooms, of which only 39 per cent are branded properties, which means the whole of India has less branded rooms than the island of Manhattan. What's more, India has only 22,000 five-star rooms.

India is the second most important market for Hilton in the Asia-Pacific region after China, and accounts for 17 per cent of the 300-odd new hotels it plans to add in Asia-Pacific by 2017; China accounts for 63 per cent of the new projects.

Hilton expects India to account for 15-20 per cent of its revenues in the Asia-Pacific region by 2015. To make up for its late entry, Hilton has roped in four strategic partners like DLF, Marigold, Shiva and JMD to develop these hotels.

In 2006, DLF and Hilton entered into a 74:26 per cent joint venture to develop 50-75 hotels and serviced apartments in 16 cities. Sixteen of these hotels are under development with secure plots of land and funding is in place for 6-7 of them. "DLF is committed to these projects. There's no issue with existing projects. The only impact that I see is that there could be a delay of 12-18 months due to the credit crunch," said Rinck. Hilton will invest $143 million in the development JV, which in turn, will have a management contract with Hilton.

Hilton has entered into an agreement to franchise its Hampton by Hilton brand to Marigold Hospitality, a JV between Palm Holdings and Trikona Capital, which will franchise 16 hotels. It has also signed a deal with Shiva Hotel to develop 2,000 rooms; these hotels will be over and above the 20 projects under development.

Rinck feels that 2009 could be a more difficult year than 2008, when the revenue per available room could fall by 10 per cent. The financial turmoil, followed by the global slowdown, has forced firms to curb spending on travel and meetings.
Ranju Sarkar in Mumbai
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