Maar MGF to Develop 4 Hotels for Marriott

Maar MGF to Develop 4 Hotels for Marriott

Author: varma
Date Created: Apr 4, 2008 - 8:15:17 AM

Hospitality major Marriott International Inc has entered into a tie-up with Emaar MGF, a real estate developer to design, construct and equip luxury-branded JW Marriott hotels in New Delhi, Hyderabad, Kolkata and a ‘Courtyard by Marriott’ hotel in Amritsar. An investment of over $400 million will be made by Emaar MGF in these four properties, which will have a total inventory of 912 rooms. Currently, Marriott has tie-ups with real estate players like Raheja and Unitech, among others.

“This is just the beginning. We are exploring to develop more properties at the same places and others with Marriott,” said Shravan Gupta, executive vice chairman and managing director, Emaar MGF Land Limited.

The real estate company is also looking at hotels at places including Lucknow, Kolkata, Chennai, Cochin, Chennai, Mysore and Jaipur to name a few. “We will be looking at both Tier I and II cities for hotels,” said Gupta. As part of the agreement, Emaar MGF will be the owner and developer of the proposed hotels and Marriott International shall provide advisory and management services for the planning, design, construction and operations.

Asked how the company plans to fund these projects following the withdrawal of its IPO recently, Sanjiv Rai, chief operating officer - hospitality, Emaar MGF Land Limited, said, “It will be a through debt, internal accruals and project financing.”

Adds Gupta, “The financial closure for these properties has already been done. The IPO market will present another opportunity for us in 12-18 months.” He, however, acknowledged the fact that hotel investments had long gestation period.

The four hotel projects are likely to be completed by 2010 end, with the Amritsar property to come up first.

Emaar MGF has a tie-up with other hospitality chains as well, including Accor, Four Seasons, the Hyatt Group, Premier Inn and InterContinental Hotels Group (IHG). It has a joint venture with Accor for the development and operation of the “Formule 1” brand of budget hotels. “We are looking at 100 Formule 1 every 10 hotels over 10 years,” said Rai. The company also has JV agreement with Premier Inn for mid-market category hotels. “50 Premier Inn are planned over seven years,” he added.

“We have already entered into a memorandum of understanding (MoU) with Hyatt for a few properties,” he said.

Asked what is the outlook for India, president and managing director of Marriott International, Ed Fuller, said, “We are very positive about India.
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