Join hospitality professionals

Enter your email address:

Get all the latest job, news, views, ideas and more FREE!!

Global asset management firms enter Indian hotels business

Large scale expansion in the booming hotel industry is making the international hotel asset management companies enter the country. US-based HVS International has firmed up plans to manage assets of hotels on behalf of the owners, charging them 2% of hotels’ revenue as fees, which is in sync with the global trend.

Industry players believe other international hotel asset management companies such as Ashford Hospitality Trust and IFA Hotels & Resorts among others are likely to follow suit.

Traditionally, hotel owners have been managing hotels in India but in the last two years many new tie-ups have taken place in the hotel space with real estate developers tying up with hotel management companies and hoteliers tying up with international brands.

“The ownership patterns in the hotel industry are changing. Indian hotel industry has become competitive with so many brands now available. In such a scenario, there is a need for asset management companies to ensure that investors or the owners get best from their operators,” HVS International associate director Siddharth Thaker said. India will have around 40 international hotel brands by 2011.

According to industry sources, at least three international hotel asset management companies are holding investor conferences in the next two to three months. Joan Lang LaSalle is also looking at starting hotel asset management operations in India, added a senior executive of a hotel company.

Says Sarovar Hotels executive director Ajay Bakaya: “The time is just ripe for asset management companies to come in and we believe many of them have zeroed down on India as high growth market.” Agrees Carlson India executive vice-president KB Kachru: “The landscape of Indian hotel industry is changing fast. I believe more and more asset management companies will manage hotel properties than ever before. This will help institutionalise the industry and will lead to better bottomline for hotel companies.”

Globally, the trend of asset management companies managing hotels is quite rampant, however, in India it has just kicked in. As more private equity capital is being invested in hotels the need for asset management companies will only grow to ensure that the ‘brand’ or the operator is giving best possible returns to the investors, says industry heads.

Some of these PE investments include Warburg Pincus Rs 280 crore investment in Lemon Tree Hotels and $55 million investment by Credit Suisse in the Park Hotels. According to an IndusView Advisors report, it is estimated that more than $2 billion is likely to be pumped during the next three years in the hospitality sector. Many private equity funds are allocating as much as 50% of their planned real estate investments into the sector as hospitality remains highly under serviced area with a huge demand supply imbalance.

Source: Economic Times

MAK group to launch new brand of hotels

MAK Hotels & Resorts, Hyderabad has announced the launch of a new brand of hotels called Blue Lotus. The brand will operate in budget, business, boutique and luxury segments. According to the chairman of the group, Murali Krishna Reddy, "We have a budget of Rs 300 crore for the next five years. We are primarily looking to build business class and budget hotels."

He added, "For this purpose, land has been already brought in Chennai, Nagpur and Mysore. Our focus is Hyderabad, Chennai, Bangalore, Mysore, Nagpur and Pune. The first hotel will come up in two years. The target is to build five hotels in five years. All the hotels will be built and operated by us unlike the BOT route."

Apart from this venture, the MAK group is also coming up with a 250-room business hotel, a service apartment and a retail mall near Hi-Tec city in Hyderabad. This is expected to open by the end of 2009. The group is also the franchisee for a five-star luxury hotel in Hyderabad.

A new concept in compact city hotels

nitenite is a micro boutique hotel destined to open in city centers and Airports across Europe and key locations globally, following the success of a pilot hotel opened in Birmingham in 2006. nitenite is unique in delivering a high quality luxury sleep experience at a great value price – and for demonstrating that hotel rooms do not need windows.

The nitenite concept delivers compact, perfectly formed bedrooms in the heart of the city. Taking as its cue the feel of a cabin aboard a luxury yacht, each fully air-conditioned room utilizes high-quality cherry wood, leather finishes, a high end quality mattress and Egyptian cotton bedding, and features the very latest technology, including a 42" plasma screen, multi-channel entertainment, wireless Internet access and high-tech wet room with power shower.

Thanks to its compact dimensions and fact that it is a prefabricated unit built in Italy and rolled in on wheels – a room footprint is typically 70 sq ft - nitenite can provide this level of luxury in a prime city-centre location for around £50 a night – a price-quality combination hotel guests have never experienced before.

nitenite hotels are designed to suit both business and leisure stays, being sited in city centre locations that are close to travel hubs, business districts, restaurants, and town centre parking. Experience in Birmingham has shown nitenite to be an ideal overnight location for the city visitor enjoying a night out. Weekdays, nitenite is popular with business travelers who either resent paying for hotel services they don't use, or simply could not otherwise afford such a luxury room due to budget restrictions.

Because of the way they are designed, nitenite hotels can be located in buildings that would not suit a traditional hotel; this delivers regeneration, maximises the potential of mixed use schemes, and enables the delivery of a great value hotel experience within a profitable business model.

nitenite is rolling out across the UK, Europe and into key city locations globally, and is seeking sites and development partners to speed this process.

Colin Hatt, the company’s CEO says, “Customers in Birmingham have already proven to us that they love the idea of a quiet, safe, comfortable and luxurious room at a great price, in the heart of the city.”

nitenite opened its first, 104 room hotel in central Birmingham, just minutes from The Mailbox, Broad Street and the Bullring - a location that has been open and operating successfully for almost a year.

The successful operation has also given the nitenite team valuable customer feedback, with which they will further fine tune the concept in new locations. They are passionate about nitenite, and are keen to ensure that each opening is managed to the same high standards, to create a friendly, cheeky brand that consumers will engage with. Each hotel has 24 hour front desk staffing, and adjacent cafe facilities for breakfast and snacks.

The team that developed the concept are adopting a flexible model to enhance opportunities for new openings. Buildings may be purchased or leased; hotels will be directly operated or run under a co-ownership arrangement. The concept employs a substantial element of off-site prefabrication, allowing for fast development, and high, uniform standards of internal finishes. nitenite is also happy to speak with potential investment partners – though the expansion plans are not dependant on additional funding.

nitenite has already purchased a building in Berlin for its first German 230 bedroom hotel, which is due to open in June 2008. nitenite has also acquired a fantastic site in London Waterloo (due to open early 2009) and are in negotiations for sites in the UK (Manchester, Sheffield, Liverpool, Bristol, London King’s Cross and London Canary Wharf), Germany (Stutgard, Frankfurt, Munich and Hamburg), Ireland (Dublin, Cork and Belfast), Austria (Vienna) and Switzerland (Zurich). They have negotiated a lucrative partnership with a key business player in New York and are currently researching available sites that would be suitable for introducing this exciting new product into the USA.

Holiday Inn Gets First New Logo in More Than 50 Years

By Amy Wilson and Oliver Staley

Oct. 24 (Bloomberg) -- Holiday Inn, the pioneer of roadside motels more than 50 years ago, will get its first new logo as part of $1 billion in renovations planned for the chain to revive sales.

InterContinental Hotels Group Plc, the world's largest hotel company by rooms, will upgrade more than 3,000 Holiday Inns and Holiday Inns Express worldwide, the Windsor, England- based company said today. The flowing script design on a green background logo, once featured on neon signs across America, will be replaced by a stylized white ``H'' on a green square.

``In many people's eyes, it's a brand of the 20th century rather than the 21st century, and it's seen as being rather dated in its home market,'' said Alistair Scobie, an analyst at Dresdner Kleinwort in London. ``It's been a fantastic brand in its time. InterContinental considers itself a branding company, so they've got to spend money on the brands.''

Holiday Inn, founded in Memphis, Tennessee, in 1952, will have ``significantly higher'' revenue after the renovations, InterContinental said. The chain's U.S. sales growth has trailed the company's more upscale brands, such as Crowne Plaza. The first revamped property will open in the U.S. next year, with the improvements finished across the chains by 2010.

Shares of InterContinental fell 2 pence to 1,034 pence. The stock has declined 20 percent in 2007 after gaining 50 percent in 2006.

Franchise Owners

Holiday Inn franchise owners will have to ``earn'' the right to hang the new logo by investing as much as $150,000 per hotel in new bedding, shower rods and landscaping, said Steve Porter, head of InterContinental's North American operations.

Porter said customers will embrace the change and dismissed comparisons to Coca-Cola Co.'s ill-fated switch to New Coke.

``We're not changing our formula, so there is a similarity but a very significant difference,'' Porter said. The old logo ``which was right for its time, has been reengineered so it's right for this time.''

InterContinental will spend 30 million pounds ($61 million) to speed the rebranding, which will be reported as a one-time charge.

Holiday Inn's third-quarter U.S. revenue per available room, a measure of rates and occupancy called revpar, rose 4.5 percent in the third quarter, compared with 5.4 percent growth for all InterContinental U.S. hotels. Crowne Plaza's revpar grew 7.7 percent, while the InterContinental brand increased 8.9 percent.

3,800 Hotels

InterContinental owns, manages or franchises more than 3,800 hotels with more than 563,000 rooms in nearly 100 countries. It has sold hotels to property investors and turned to management or franchise contracts to make its revenue stream more stable.

The International Association of Holiday Inns, which represents about 3,000 of the chain's owners and operators, said in the statement that it ``strongly supports this development and looks forward to the business improvement it will deliver.''

Holiday Inn, with more than 3,125 hotels, was founded by Kemmons Wilson as one motel in Memphis designed to give travelers clean and affordable lodging. Bass Plc, InterContinental's now-defunct former parent company, bought Holiday Inn in 1998.

To contact the reporter on this story: Amy Wilson in London at ; Oliver Staley in New York at .

Hotels train staff for naked sleepwalkers

Workers at a leading chain of budget hotels are being given advice on how to deal with naked sleepwalkers after an increase in the number of guests found wandering around in the night with no clothes on.

A study by Travelodge found a seven-fold increase in sleepwalking customers in the past year, to more than 400 cases — almost all of them men.

Many sleepwalked naked into the reception area asking for a newspaper, or saying they wanted to check out. One naked guest was arrested after being locked out of the hotel.

Chris Idzikowski, of the Edinburgh Sleep Centre, said: "These figures are a surprise.

"Sleepwalking can be triggered by a stressful lifestyle, sleep deprivation, alcohol abuse or not breathing properly during the night."

Travelodge said it was sending a guide to its staff on how to deal with sleepwalkers, such as keeping a supply of towels in reception to help preserve a guest's dignity.

Leigh McCarron, Travelodge's sleep director, said: "We have seen an increased number of cases over the years so it is important that our staff know how to help sleepwalkers when it arises."