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Orient-Express may roll into India

Interest rooted in mid-life rebranding exercise

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Hotels (OEH), the Bermuda-based owner and operator of luxury hotels, trains, river cruises and restaurants, is open to expanding its global reach, which could include a base in India.

Sources familiar with the developments said the NYSE-listed OEH could be exploring possibilities of entering India if there were ‘opportunities’. The company has started the process of scouting for management contracts globally, for new properties.

“We are always looking at possibilities for acquisition and expansion into management contracts but do not have anything to report at this time,” said a spokesperson at OEH, in an email response seeking to know if India would feature on its list of future markets.

OEH’s India interest is rooted in the mid-life rebranding exercise it is undergoing. The company has rebranded almost all of its properties under a new brand called Belmond.

The company has retained its long-term licence agreement with SNCF, the French transportation company that owns the Orient-Express trademark, for the Venice Simplon-train. With the decision to introduce the Belmond brand, the company also entered into an agreement with the French company to terminate the existing Orient-Express licence for hotel use.

OEH hit the headlines when Tata Group-promoted Indian Hotels Company, in a rare show of aggression, launched a $1.86-billion takeover bid in October 2012. The bid was declined by OEH the following month, saying it was undervalued.

Though India has seen the entry of almost every major luxury hospitality brand, ranging from Four Seasons to Shangri La to Fairmont, the country has been missing from the radar of Orient Express.

An improving economy is fuelling India’s appetite for quality stay, grossly under-supplied, with no city able to match the total inventory of rooms when compared to its global peers. The total room inventory of India from the organised sector is less than the room inventory of some of the mega cities of the world.

“There is a lot of potential for India. There would be a pick-up as soon as the economy turns around. There is a slowdown in the market (now) because the new supply has come up. But over the longer period, there would be a pick-up in demand. There are more number of rooms in Las Vegas than the whole of India put together,” said Homi Aibara, senior partner, Mahajan and Aibara, a hospitality consulting firm.

With only 45 hotels under its belt, OEH is significantly smaller than other global hotel companies. It primarily targets leisure-oriented guests for its properties as against business travellers (in addition to leisure) chased by other hotel companies. With its limited inventory of luxury villas and resorts, & Resorts comes close to the business line towed by OEH. Oberoi Hotels operates only 17 properties globally, including 11 in India. Like OEH, Oberoi offers boat cruises to guests.

However, after the rebranding exercise, the Bermuda-based company is keen to tap into the pool of business travellers and, thereby, reduce its overwhelming dependence on leisure travellers. The company, which has properties in various tourist hotspots of the world, therefore wants to shore up its hotel count, especially in gateway cities.

Belmond aims to change into a hybrid luxury brand catering to business and leisure travellers. For this, it is scouting for management contracts in various mega cities. One of its new contracts would come up in New York and London soon.

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