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Prestige looks to more than double hotel rooms by 2023

The builder has entered into an agreement with Marriott International to open six hotels in the country. As per the terms of the agreement, Prestige Group will build hotels of W, JW Marriott, Tribute Portfolio and Moxy brands across southern India. About 1,000 rooms under four brands will come up in Bengaluru, Chennai and Kochi.

, ET Bureau|
Nov 27, 2019, 11.31 AM IST
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Agencies
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India’s hospitality industry is expected to perform better in 2019, after a gap of a decade.
BENGALURU: Real estate developer Prestige Group, which signed a partnership deal with Marriott International on Tuesday, plans to more than double rooms in its hospitality business to 3,100 over the next four years, according to its chairman, Irfan Razack.

Once the new hotel rooms become operational, the portfolio will contribute about Rs 1,200 crore in rental income to the Bengaluru-based Prestige Group, Razack, who is also the company’s managing director, told ET. The company currently has 1,250 operational keys across different brands.

“There are not many industries in the world that have the resilience and optimism of the hospitality sector in India. Projected to be worth Rs 1,21,087 crore by 2023, the Indian hospitality sector today is witnessing an upward trend across mid-scale, upscale and luxury segments,” Razack said.“Renewed interest in the sector from leading global investors and steady infrastructure development in metros as well as tier II and tier III cities are driving the demand.”

The builder has entered into an agreement with Marriott International to open six hotels in the country. As per the terms of the agreement, Prestige Group will build hotels of W, JW Marriott, Tribute Portfolio and Moxy brands across southern India. About 1,000 rooms under four brands will come up in Bengaluru, Chennai and Kochi. These hotels are expected to open between 2021 and 2025, both companies said in a joint statement.

The agreement will also mark the Indian debut of the Moxy brand, which targets millennial travellers. The 125-room Moxy Chennai and 200-room Moxy Bengaluru are expected to open in 2024.

Rajeev Menon, president, Asia Pacific (excluding Greater China), Marriott International, said, “We are continuously striving to expand our market reach, strengthen our growth and set new hospitality benchmarks. Our portfolio of 120 hotels across 16 brands reinforces our commitment to India, which remains a key focus market for Marriott International… India continues to be a critical growth engine for us in APAC.”

Industry-friendly government policies, including reduction in GST to 18% from 28% for premium and luxury hotels, reduction of corporate tax, and UDAN—the regional airport development and Regional Connectivity Scheme (RCS) aimed at making air travel affordable and widespread—are paving the way for robust market demand.

Last month, Prestige Group had entered into a joint venture with DB Realty to develop a hospitality-led mixed-use project spread over 7.7 acres in Delhi’s Aerocity. The group is planning to build India’s largest hotel and convention centre on the said land parcel.

CRISIL DA1-rated Prestige Group has completed 236 projects with developable area of 123 million sq ft. It has 48 ongoing projects across segments, with total developable area of 48 million sq ft. It also has 55 million sq ft under planning and holds a land bank with potential developable area of over 29 million sq ft.

India’s hospitality industry is expected to perform better in 2019, after a gap of a decade. The industry has faced oversupply, slowdown in demand due to macro issues, and disruptions through technological innovations.

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