x Abu Dhabi, UAEThursday 27 July 2017

UAE hotel companies include India within expansion plans

Jumeirah Group, the Dubai luxury hospitality company that manages Burj Al Arab, is close to signing a deal for a resort in Goa, as UAE hotel companies look to expand into India.

Jumeirah Group, the Dubai luxury hospitality company that manages Burj Al Arab, is close to signing a deal for a resort in Goa, as UAE hotel companies look to expand into India.

The management contract would be Jumeirah's second in India, after the group four months ago signed an agreement to run a hotel being built in Mumbai. "I think very soon we'll be announcing a project in Goa," said Gerald Lawless, the president and chief executive of Jumeirah Group, speaking at the Hotel Investment Conference South Asia in Mumbai yesterday.

"That should happen within the next few weeks."

The deal would be with the same Indian owner and investor behind the Mumbai property and the resort would take a "few years" to complete, Mr Lawless said, declining to provide further details including the size and cost of development.

Abu Dhabi's Rotana Hotels has also set its sights on India.

The operator, which manages properties across the Middle East and North Africa, opened a development office in Gurgaon, a satellite city of New Delhi last year, as it aims to open hotels in India.

With a burgeoning population of more than 1.2 billion and a growing middle class, India needs more hotels to cater to the growing appetite for its citizens' travel within the country, as well as to tourists from abroad.

Still, there remain challenges in the market, including pressure on revenues amid an increase in hotel supply and slowing economic growth. Hotel development is also often a much slower process in India compared with many other parts of the world. Rotana believes it is just a couple of months away from announcing its first hotel management agreement in India for a five-star property planned for the National Capital Region of Delhi, having already signed a letter of intent.

"We've been engaged in some very active negotiations with developers," said Adman Aditya Sachdev, Rotana's senior vice president for India. "We're looking at about 20 operating hotels within the next 10 years. We are in discussions in Bangalore, in Kochi, in Goa, in Jaipur."

About 10 per cent of Rotana's business comes from India, he said. "We're actually looking to grow that to about 12 to 15 per cent over the next 24 months, so India is, of course, important to us from expanding the brand footprint point of view and at the same time it's a very important source market for Rotana."

Dubai's Emaar has also talked about plans to take its The Address hotel brand to India.

Jumeirah Group, meanwhile, hopes to secure more agreements in India.

"We'd like to be in the major gateway cities, particularly - in addition to Mumbai - New Delhi, Chennai, Bangalore," said Mr Lawless. "To be able to announce a second property in India is really beginning to demonstrate that things are happening. For us, we should be very active in India and we should be well represented because the awareness of our brand in the Indian market is so high - because of Indians' exposure to Dubai."

Jumeirah last November agreed to manage a 470-room hotel in Mumbai. That hotel, which is part of a new development in the Lower Parel area of central Mumbai, is expected to open in 2017.

Outside of the UAE, Jumeirah manages hotels in London, Frankfurt, the Maldives and other locations.

 

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