No change in deal with DB Group: Hyatt
Chicago-headquartered Hyatt Hotels Corporation, one of the world's biggest hotel chains, is going ahead with plans of opening five hotels with the Mumbai-based DB Group.
The latter is presently embroiled in the 2G telecom spectrum scam, its managing director, Shahid Balwa, having been arrested (he had resigned after this took place last month). DB Hospitality is building five premium properties in Mumbai, Pune, Mundra (Gujarat) and Goa. These will be handed over to Hyatt for management, upon completion.
Steve Haggerty, global head, real estate and development, Hyatt Hotels Corporation, said, "The plan is intact. The hotels we intended to do with DB Hospitality, we still plan to open, and they remain in the pipeline. We have no further comment or information to share. We cannot really comment on what has happened with DB Realty."
"We have taken no action so as far as our role and our position is concerned, it hasn't changed. All the signed projects with DB Hospitality are in various stages of development. We expect to open Goa this year and construction on Pune is quite advanced," said Haggerty.
While both DB Hospitality and Hyatt state that work on their projects is on, some are behnd schedule. For instance, the 314-room Grand Hyatt in Bambolim, Goa, is six to eight months behind schedule, to open in the second half of this year.
A 255-room and 55-service apartment, Park Hyatt, will come up inside a 125-storied skyscraper to be built at Marine Lines in Mumbai. This project, due for completion by 2014, is also reportedly behind schedule.
"We are not sure if the Marine Lines project will be finished by the given date but as of now, 2014 remains our target," stated a senior executive from DB Hospitality.
Funds, expansion
Sources say the projects are going slow due to a shortage of funds. These had been planned to come up from private equity placement, debt and internal accrual. DB Hospitality was planning to spend Rs 5,500 crore for nine hotel properties. Reports say a planned private equity fund infusion has yet to happen.
Hyatt, present in India since 1983, is planning to take its tally to 38 hotels in India from the present six. The company has tied up with various partners for the projects, spanning several Tier-I and Tier-II cities.
The expansion is spread across five brands, with 28 properties equally shared between Hyatt Regency and Hyatt Place equally. However, senior company officials refused to state if DB Hospitality would partner in any of the new projects.
"Our pipeline is comprised of 38 projects. We do not announce projects until they are done. We don't talk about prospective deals. We have a development team based in Gurgaon, who work on a variety of projects. Their role is working with parties, negotiating transaction, choose sites, plan hotels," said Haggerty.