Travel-Hospitality Nexus Takes On New Meaning

InterGlobe, Bird Group, TUI AG & Thomas Cook Home In On Hotels

Vyas Sivanand - Bangalore

Michael Frenzel There is a possibility that we could venture into the Indian hospitality industry as hotels form a backbone of our business

The boom in Indian tourism and resultant upswing in the hotel sector has spawned a mini-revolution of sorts in business extension - a host of national and international travel companies may now enter the hotel sector in this country in the near future. In what constitutes a significant trend of diversification into the hotel business (earlier apparent in the realty and pharma industries) major travel companies such as Bird Group, TUI AG and Thomas Cook, besides InterGlobe, are making a foray into the Indian hospitality industry.

These travel companies are venturing into hotels either through a joint venture (JV) route with an existing hotel partner or as a wholly-owned enterprise. Not so long ago, InterGlobe Enterprises and Accor inked a JV agreement to form InterGlobe Hotels. Following on a similar vein, the Bird Group (from the Amadeus stable) plans to open 20 hotels across India with an initial investment of over Rs 800 crore. The company has already acquired land in New Delhi and Goa for development. Revealing this Radha Bhatia, chief financial officer, Bird Group said, "We are starting the hospitality division and currently plan to have about 20 properties in the country. Eventually we are looking at about 10,000 rooms."

An addition to this bandwagon may be the European travel biggie TUI AG, with 285 hotels in 28 countries. The company, which recently inked a joint venture agreement with Le Passage to venture into the inbound travel segment is not turning a blind-eye to the immense potential of the Indian hotel sector.

Ashwini Kakkar Thomas Cook has in the past bid for hotel properties in Kovalam and Goa with an intention to make a foray into the Indian hotel sector as it makes good business sense to us

Speaking about the company's investment plans in the hotels sector in India, Michael Frenzel, chairman - executive board, TUI AG, revealed, "Though the current JV does not look at the hotel business in India, there is a possibility that we could venture into the Indian hospitality industry as hotels form a backbone of our business. However, there are no immediate plans in this regard."

InterGlobe Hotels has already announced its intention to invest in and develop a minimum of 25 Ibis' brand economy hotels across India and South Asia over the next 10-12 years. The company will be making an estimated investment of over Rs 850 crore over this period. Says Rahul Bhatia, managing director, InterGlobe Enterprises, "We at InterGlobe have a firm belief in India's travel and tourism segment, especially in enterprises that provide consumers true 'value for money'. Our joint venture with Accor for Ibis economy hotels extends the large footprint we already have across India's travel landscape."

Elaborating Ashwini Kakkar, chief executive officer and managing director, Thomas Cook (India) Ltd said,"Thomas Cook has in the past bid for hotel properties in Kovalam and Goa with an intention to make a foray into the Indian hotel sector as it makes good business sense to us, for example; wouldn't it make good business sense to us to have our own hotels when each day our company buys out a minimum of 1,500 room nights. Unfortunately, those projects didn't take-off. Yet, we are looking at diversifying into hotels when the appropriate projects come our way."