Tobacco-to-foods major ITC Ltd said its marketing and franchisee tie-up with Sheraton Corporation, a part of the Starwood Hotels and Resorts, was under review.
A spokesperson for ITC, however, said review talks were part of the normal process and did not indicate that the tie-up was coming to an end.
Of 60 ITC hotels, 10 are branded Sheraton. ITC's Hotel division was launched in 1976 with a Chola Sheraton in Chennai.
"Negotiations are going on and will conclude in about two months. Position on the matter will be clear only then," said an ITC spokesperson.
On the market buzz that the 30-year relationship between the two companies was strained, the spokesperson said,
"There is no such issue. Relooking is an ongoing process and keeps on happening as market dynamics change." While market sources put the contract renewal date to be around mid-2006, the ITC spokesperson did not give a date.
The market buzz is largely based on the fact that Starwood had bought a property for its Westin brand in Gurgaon (in the NCR region).
Further, according to the market buzz, Sheraton has asked for a higher share in the revenues from ITC and may even consider changing partner for India.
Industry sources suggest it would not be easy for either partner to break away easily when the coming times are sound quite good for the industry. "The 30-year relationship has stood the test of time and been without any squabbles," said an insider.
Domestic room rates in the current tourist season (October-March) have seen a high of about US$280-290 per night (at The Imperial, Delhi and Leela, Bangalore) compared with $130-135 in Singapore.
Also, most 4-5 star hotels stand booked till mid-2007. This is owing to total hotel rooms availability (about 91,000, across sectors) hovering at about half of the demand.Today, ITC stock closed at Rs 144.95 on Friday, slightly down from its previous close of Rs 145.40.