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INDIA BUSINESS WORLD - 16th JANUARY - TO - 31st JANUARY - 2009
HYATT IN 24:76 JV WITH PROPERTY DEVELOPER EMAAR MGF FOR SIX HOTELS IN INDIA BY 2013
US-BASED hotel chain Global Hyatt Corporation has announced a 24:76 JV with property developer Emaar MGF for six hotels in India by 2013. The two partners will invest $200 million to build six hotels under the midmarket brand—Hyatt Place.
Besides, Global Hyatt has signed management contracts with individual property developers for 14 more hotels to be operated under its premium brands Park Hyatt, Grand Hyatt and Hyatt Regency. Under a management contract, the real estate developer builds the hotel and the hotel operator charges a management fee from the real estate developer for managing the hotel.
Asked if the time was right for such an announcement given the fact that real estate developers have shelved hotel projects, the global head for real estate & developments for Global Hyatt Corporation Steve Haggaerty said: “There are concerns. But we have already acquired land for the six hotels and construction for the other 14 is in various stages of development."
He added the investment (in Emaar-MGF JV) would be a mix of equity and debt and we are in the process of raising the debt component." Global Hyatt Corporation on its own will invest $20-25 million as equity into the six hotels to be located in Gurgaon, Hyderabad, Mysore, Lucknow, Indore and Mangalore. These hotels will add up to 950 rooms and the first such hotel will open in 2011.
"We have also entered into management contracts with several local real estate developers to open 14 hotels with an inventory of over 3,000 rooms by 2013," said Global Hyatt Corporation senior vice-president-South Asia Ratnesh Verma. These premium hotels will be built in Kolkata, Hyderabad, Mumbai, Chennai, Goa and Pune.
Talking about the impact of the global economic slowdown, Mr Haggerty said occupancies have come down at its existing five hotel properties in India.
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