Newstrack

Intl management/franchise cos consolidating through ownerships

EH Staff - New Delhi

The recent events in the hospitality space of buying out stakes by international companies in their Indian counterparts, who managed or franchised these brands in India, indicate towards a strong changing trend where international brands are strongly looking at an ownership model. The stance of Choice Hotels International and Carlson Hotels Worldwide regarding their operations in India are clear examples of this new business approach. Recently, Choice Hotels International announced an agreement to convert Choice Hospitality India to a wholly-owned subsidiary. The US-based hospitality major bought its entire India business by taking over 60 per cent stakes from its franchise partners. On a similar note, Carlson Hotels Worldwide to strengthen its position in India has acquired a majority stake in its Indian partner - RHW Hotel Management Services - by increasing its stake to 87 per cent from 13 per cent.

On the other hand, the Thailand based hotel company - Amari - also recently announced its international ambitions to manage properties and expects India to be its first international venture, if deliberations go according to expectations. Peter Henley, president & CEO, revealed that although the group is looking at opportunities to manage hotels in India, it will look at the possibilities to invest in the property for ownership if the location is according to its desired understanding of investment. So it is becoming evident that companies are no longer averse to investing in India if the opportunity is lucrative, which was the case four years back or so when they preferred at franchising their brands or managing properties. These companies are finding it wise to invest in ownership apart from allocating a designated sum for various comprehensive programmes for the group to operate in a different country.