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RIL checks into hotels business

By Nayantara Rai in New Delhi
April 11, 2007 10:58 IST
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The Mukesh Ambani-controlled Reliance Industries is entering the supply-deficient hospitality business and is in talks with big international names such as Walt Disney, Ritz Carlton and Four Seasons for managing some of their hotels.

The diversified group intends to set up all categories of hotels - luxury, business and budget - across the country. Within the luxury category, it is also looking to set up hotels with themes, such as those run by Disney in the US.

Having entered consumer retail and special economic zones in the last two years, Reliance considers hospitality a natural complement to its existing businesses. The corporate structure of the hospitality foray - whether it will be made through a separate company or a division - could not be ascertained.

A company spokesperson declined comment.

With domestic and international tourist arrivals increasing every year, hospitality is a booming business in India. The country has a shortage of 1,10,000 rooms, which has pushed up average room rates by 18-22 per cent annually.

Established hotel chains - Indian as well as foreign - are scaling up their operations in the country.

The sector has been attracting a bevy of new entrants. Nusli Wadia's Bombay Dyeing recently unveiled its hospitality foray by setting up two hotels in Mumbai. Many real estate developers too have announced plans of entering the sector. The New Delhi-based real estate giant DLF Ltd has forged a joint venture with Hilton International to build 75 hotels and service apartments.

Reliance's hospitality blueprint revolves around leveraging its petrol pumps, large retail complexes and the special economic zone in Haryana.

"The Haryana SEZ will have an entertainment city consisting of theme parks, for which talks are on with Walt Disney and Universal. Like Disneyworld in Florida, Reliance is looking to set up luxury hotels based on themes," said sources. For business hotels, the company is talking to Starwood Hotels & Resorts for its brand, Four Points By Sheraton.

While forging management contracts for luxury hotels, Reliance intends to establish and run budget hotels and motels itself at its petrol pumps across the country.

It is also planning service apartments, besides hotels, at its retail outlets. These could be branded, but managed by the company.

Reliance has land use permission for building hotels at 10-15 per cent of its planned 5,849 petrol pumps. The pumps are located primarily on expressways and highways.

Its plan to set up an entertainment city outside Ahmedabad, which would also have a few hotels, may now be reworked, following the recent announcement of a cap of 5,000 hectares on the size of SEZs.

Spreading wings

  • RIL is in talks with big international names such as Walt Disney, Ritz Carlton and Four Seasons for managing some of their hotels
  • It intends to set up all categories of hotels - luxury, business and budget - across the country. Within the luxury category, it is also looking to set up hotels with themes, such as those run by Disney in the US
  • Reliance's hospitality blueprint revolves around leveraging its petrol pumps, large retail complexes and special economic zone in Haryana
  • It is also planning service apartments, besides hotels, at its retail outlets. These could be branded, but managed by the company
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Nayantara Rai in New Delhi
Source: source
 

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