Hospitality firms parted ways with int’l brands for growth: Study

To consolidate their businesses in the challenging economic environment, domestic hospitality firms that had tied up with global brands are now parting ways to chart their own growth, a recent survey said.

India’s home-grown hospitality brands are increasingly deciding to part ways with popular global brands or more upscale brands to pave their own growth, real estate consultancy firm CBRE said.

As a part of their business growth strategy, firms are looking at rebranding and renegotiating their commercial terms, to correctly reflect the changing times, CBRE India Head – Consulting and Valuation – Rami Kaushal said.

In the last 6-7 quarters, many Indian hospitality brands parted ways with global brands, of which prominent were Leela Hotels, culminating its 25 year-old partnership with Geneva-based Kempinski, and Hong Kong-based Shangri-La International Hotel Management firm ending its relationship with Pallazzio Hotels and Leisure, a subsidiary of the Phoenix Mills, the report said.

The contract for the Shangri-La Hotel, Mumbai, was apparently inked for 20 years, but was cancelled only after nine months of operation.

Besides, Zurich-based hospitality chain Swissotel Hotels & Resorts broke up with Bangalore’s Convention, pulling out of its five-star resort at Goa’s Calangute within six months of the property launch, the report said.

“With bottom lines continuing to turn unfavourable for certain hotel owners, most firms are taking a closer look at the commercial terms with their existing hotel operators, unlike the scenario a decade ago. And the desire to remain profitable has been the major reason behind this hotel rebranding trend,” Kaushal said.

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