Indian Hotels readies $100m for global footprint
Hindustan Times — September 1, 2005

After bagging the high-profile management contract to operate and manage Pierre in New York, Indian Hotels Company Ltd, which owns the Taj hospitality chain, is looking at acquiring properties in Krabi and Phuket (Thailand), Dubai and China before the close of this year. In 2006, the group is looking at putting up a new hotel from scratch in Los Angeles.

As its service apartments initiative, Wellington Mews, prepares to celebrate its first anniversary, Indian Hotels is also in discussions with several international real estate funds such as Blackstone and Morgan Stanley Real Estate Fund to open up four more such 200-apartment projects in North Mumbai, Delhi, Hyderabad and Chennai. However, these will be in the four star segment and will not have as many frills as the high-end Wellington Mews.

Some of the group's global acquisitions, especially in tourist destinations such as Thailand, will be resorts while in Dubai, the company wants to scale up its presence with a third property in the financial district. Armed with a war chest of over $100 million -- the company raised $150 million from overseas bonds last year -the premium and luxury hotel chain has chalked out a global acquisition and expansion blueprint, which includes Australasia, the West Coast (US), West Asia and Africa.

For instance, it is keen to build on the Tata group's relationship with South Africa. Indian Hotels is targeting three properties in Cape Town, Johannesburg and Durban and plans to complete these acquisitions in 2006. A resort in Morocco also figures on the group's global agenda. Speaking to Hindustan Times, Indian Hotels managing director Raymond N. Bickson said, "These acquisitions will either be through management contracts or equity. It could also be a mix of the two. Sometimes, there is an element of token equity."

"At present, we have only utilised $35 million to renovate Pierre by 2007, out of the $150 million we raised. Therefore, we have enough funds to carry out our overseas acquisition strategy," added Bickson. Bickson is keen to establish base in the West Coast and is exploring both Los Angeles and San Francisco as options for a Taj property. "In Los Angeles, we are considering a greenfield project," he said.

Sydney has also caught his fancy. "With better flight connections between Australia and India, business has tripled, and we are scouting for an acquisition in Sydney." "The big idea is to have a brand presence in the gateway cities of the world, including in China (Shanghai or Beijing)," he said. The global strategy is not just restricted to luxury, premium hotels and resorts. The company is also planning to take its budget hotel brand -- IndiOne -- abroad once it has got a firm footing in the Indian market.

Bickson said that the group plans to get eight IndiOne's off the ground before the close of the current fiscal. At present, there is only one IndiOne property in Bangalore. Once the Indian rollout -- of over 40 budget hotels -- is complete, Bickson has identified Afghanistan, China and Africa as potential markets for IndiOne hotels.