Regent, Carlson Snap Marketing Pact

The Regent, Mumbai's first 7-star hotel, has terminated its marketing agreement with Carlson Hospitality Marketing India, the Indian arm of the US-based Carlson group.

"We terminated the marketing agreement with Carlson Hospitality because we did not benefit much from the alliance. It was not contributing any significant value to the business," Yogesh Dhawan, vice-president and general manager of The Regent disclosed.

The Lokhandwala Hotels, owners of The Regent, had tied-up with Carlson Hospitality in May to provide reservations, sales and marketing support.

Under the alliance, Carlson Hospitality would develop the hotel's business and marketing plan, monitor performance and be responsible for enhancing the hotel's market share.

"Henceforth, we will handle the marketing ourselves. We are expanding our sales network and opening offices in Delhi, Bangalore, Chennai, Calcutta and Hyderabad," Dhawan said.

As a part of its expansion plans, the Lokhandwalas are planning to build a 14-storey service apartment and a shopping cum entertainment complex adjacent to the hotel.

Unlike other hotels that are managed by international hotel chains, The Regent is owned and managed by the promoters themselves, but pays a royalty fee of 3 per cent on its gross revenues to the Carlson group, which owns the Regent, Radisson and Country Inn hotel brands.

This arrangement continues despite the split in the marketing alliance. The company's income from operations, which stood at around Rs 36 crore for the fiscal 2000-01, will see a decline this fiscal because of the drop in business travel and no significant increase in tourist numbers.

The Regent, which opened in June 1999, is expected to break even by 2005. "Post September, there has been a 30 per cent decline in occupancy level," Dhawan said.