News: Taj Hotels turns globetrotter for more revenues

(TT 05/04/2006) Mumbai - The Indian Hotels Company plans to take its Taj brand to China, Australia and Hong Kong as it prepares to make a stab at achieving robust growth in revenues from overseas operations.

Indian Hotels expects to get a third of its revenues from international operations in the next five years. “Almost 22 per cent of our business comes from global operations,” said Raymond Bickson, managing director and CEO of Indian Hotels Company.

“The Asian region is our focus area for the next few years,” Bickson added. With the extension of the brand, the group expects to extend the Taj brand loyalty to the new international locations.

Indian Hotels, a part of the Tata Group, has 18 overseas hotels and operates luxury residences in Mumbai and London.

Last month, Indian Hotels signed a marketing alliance with Korea’s Shilla Hotels, similar to the one it has with Singapore’s Raffles Hotel. Last July, it took over the lease of New York’s Pierre Hotel for 30 years. It also bought W Hotel in Australia last December for $27 million.

The group signed a 10-year management contract today with Dubai-based property developer ETA Star for a luxury hotel and residential apartment complex in Dubai.

Indian Hotels’ luxury Taj Hotels brand will operate and manage the Taj Exotica Resort and Spa and the Grandeur Residences located at the Palm Jumeirah Crescent in Dubai as it seeks to expand its presence in fast-growing international markets.

ETA Star will develop the $330 million project, which will comprise a luxury hotel and 200 luxury residential apartments for sale and lease.

The management contract may be renewed after a period of 10 years. Indian Hotels and ETA Star will examine the possibility of other similar agreements, Bickson said.

Speaking about international operations, he said the Taj Exotica Resort and Spa will be operational by 2009 and target the business and leisure traveller. “We will earn about Rs 2-5 million a year in revenues," he said, adding the group will provide full service to the Grandeur Residences.

Refusing to divulge any financial details of the agreement, Bickson said, “We are looking at a combination of joint venture deals, equity partnerships and management arrangements, as these give us access to more distribution channels.”

“Getting into a management contract helps us because this way we are able to participate in the development of the property without having any equity involvement,” he said.