Cabana Hotels is incorporated in India and operates eight Best Western hotels in the US. Best Western awarded Cabana hotels the master licence agreement for India in 2007.
Cabana will represent the Best Western brand in India and provide hotel management services. The Cabana group intends to invest over $1.2 billion in 100 Best Western branded hotels over 10 years. The company is financing the investment through its own resources and a combination of equity and debt.
However, it would look at raising private equity in the future for expansion purposes, said Prabhu Goel, co-chairman of Cabana Hotel Management. It would also look at acquiring hotels in tier-two cities as part of the plan to have 100 hotels.
Besides being the master licensee of Best Western in India, the Cabana group will also develop its own properties for Best Western Brand in India. "India's booming economy and growing travel market make the country an excellent strategic fit," said David Kong, president and CEO, Best Western International.
Cabana plans to leverage on India's growing tourism and business travel market and plans to bring its Premier hotel brand in India. The Premier brand has been operating in Europe and China for the last several years.
The Cabana group plans to convert hotels and lend the Best Western brand at 3-4 star levels or above.
Cabana already has six hotel properties under construction in Bangalore, Bhubaneshwar, Ooty, Rameshwaram, Kanyakumari and Jaisalmer. ''The pricing of these properties will be as per the market forces. But they would be premier service at a lesser cost than what the 5-star hotels charge," said Prabhu Goel, Co-chairman at Cabana Hotel Management.
According to estimates, there are close to 110,000 hotel rooms across all categories in India. This number is abysmally low when compared with those in other countries - China has 10 times more and the United States 40 times more.
There is an immediate requirement of approximately 100,000 new hotel rooms but only 75 per cent of that demand will be met by the projects that are currently under way.
