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ITC to host top Starwood line

December 30, 2006 01:37 IST

Luxury Collection, one of Starwood Hotels & Resorts' most premium brands, will foray into India with ITC Hotels.

The 10 ITC Hotels branded as Sheraton at present were expected to be re-branded as Luxury Collection soon, sources in the know said.

The sources added that ITC's south Delhi property -- the ITC-Welcomgroup Hotel -- would be re-branded as Sheraton.

When contacted, an ITC Hotels spokesperson said, "An announcement will be made at the appropriate time."

On his part, Stephen Ford, Starwood vice-president and area managing director, South Asia, said, "I cannot comment on these developments now. I shall reveal our plans only at the appropriate time."

The development arises a year after ITC Hotels and Starwood's 30-year exclusive contract for the Sheraton brand expired.

In April 2006, Ford had told Business Standard, "Starwood has conveyed to ITC that it will have the option to expand its Sheraton brand on its own, as well as in partnership with some other company. Similarly, ITC can expand on its own."

Said Lokesh Sabharwal, associate director, HVS International, a hotel valuation and consultancy firm, "The ITC-Sheraton hotels in India are more upscale than typical Sheraton hotels in international markets. This way, Starwood is able to bring Luxury Collection to India without making a very large investment."

Another industry expert said that since the cost of building a room for a Luxury Collection hotel would be approximately Rs 1.25 crore or more, there might not be too many hoteliers or developers willing to build such a hotel from scratch.

One advantage accruing to ITC Hotels from the agreement is that it will be able to leverage Starwood's clientele for luxury hotels from international markets.

While average room rates for the Luxury Collection are substantially higher than Sheraton's in international markets, it remains to be seen whether the re-branding will affect rates in India.

"With such a huge gap between demand and supply, even small guest houses are overcharging these days. Pricing, at the moment, is being determined only by the demand-supply gap. We also have to see whether there will be a significant change in the product. For example, Maurya Sheraton in New Delhi is reducing its room inventory to add more luxury suites. That might have a small impact on the rates," said an industry expert.

Nayantara Rai in New Delhi