Published On:July 12 2019
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Shangri-La Group plans to set up 5 new hotel and resort properties in India.

Hong Kong-based multinational hospitality group Shangri-La is planning to set up five new hotel and resort properties in India. The group is in talks with multiple property owners, said John Northen, executive vice-president, middle-east, India and Indian ocean for Shangri-La Group.

Shangri-La, which currently has two properties in India, is eyeing locations in Mumbai, Kolkata, Goa and Rajasthan, among others. Currently, the management is in discussion with several property owners, including its existing partner in the country – New Delhi-based Eros group. While the hospitality group is in active talks with real estate developers and owners, Northen said the company was also open to building planned properties on its own. “We have not yet decided whether we will set up these new properties on our own or through management contracts,” he said.

The two existing Shangri-La hotels are located in New Delhi and Bengaluru. While the New Delhi property is a few decades old, it was revamped recently. Shangri-La’s Bengaluru hotel, which opened its door in 2015, cost Rs. 780 crore. While both of its existing properties are under its mother brand Shangri-La, the group may finally introduce some of its other international brands like Traders Hotel, Kerry Hotel, Hotel Jen and Shangri-La Resorts through the upcoming properties.

While the expense of setting up new properties is not yet finalised, it is estimated that the cost of a new five star property, with 300 to 500 rooms, ranges between Rs 1,000 and Rs 1,800 crore.

Globally, the group has 102 properties, of which 85 are under its mother brand. While it continues to have 40 of these in China, Northen said demands in India were surging. “Increasingly, the growing affluent section of local population is driving the five star hotels business in the country. Majority of our sales in our New Delhi property comes from Indian visitors,” he said.

This has resulted in addition of new prospective markets like Kolkata that has recently found a place in the map.

Further, the growing habit of eating out among Indians is also boosting prospects for new luxury hotels. In a market like India, where room tariffs are comparatively lower than some of the prime locations like London, revenue from food and beverage remains higher, at times over 40 per cent of hotels total revenue.

BS





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