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US-based Starwood Hotels and Resorts Worldwide is in talks with the promoters of Mumbai-based Phoenix Mills to explore a management contract deal for the latter's luxury property Palladium Hotel.
Starwood, the hospitality company which has nine hotel brands globally in the mid-segment and above category, is comtemplating bringing its full-service luxury hotel St. Regis to the city.
Pallazzio Hotel & Leisure, the subsidiary company of Phoenix Mills Limited, owns the 400-room Palladium Hotel. This property was formerly managed by Hong Kong-based Shangri-la Hotels and Resorts before it made an exit last month.
Sources said that Starwood executives visited the property a few weeks back and talks are being held for a management contract. An internal team at Starwood is evaluating if the hotel suits the St. Regis brand in terms of decor and architecture.
Dilip Puri, managing director India and regional Vice President South Asia Starwood Asia Pacific Hotels and Resorts said, "Currently we have no comments on this".
Shishir Shrivastava, Director, Pallazzio Hotel & Leisure said, "We are in talks with several operators. We have not concluded the deal with anybody yet".
Being a flagship luxury brand in the portfolio Starwood is eyeing the Mumbai market to kick start operations for several St Regis properties in the country. It is also targeting Delhi for the same brand.
Starwoods also evaluated its luxury and upscale full-service W Hotels and Westin for the Palladium property. However source say that the architecture would be unfit for a W Hotel while a Westin is already operational in the suburb of Goregaon in Mumbai.
Further, according to sources, the promoters of Phoenix Mills, the Ruias, have held talks with foreign hotel brands like Intercontinental Hotels Group, Marriott Hotels and Hyatt Corporation. A couple of Indian brands have also discussed a management contract.
Starwood Hotels presently has 37 properties across India, including those under partnership with ITC Hotels. It has five brands in the country such as Westin, Aloft, Four Points by Sheraton, Le Meridien and Sheraton.
Pallazzio Hotel has no experience in running a luxury hotel as this would be the first such occasion. Palladium Hotel is named after the Palladium mall which shares the premises of the property.
As per the original agreement with Phoenix Mills Shangri-La had rights to operate the property for a period of 20 years. But neither parties divulged details of the reasons behind the termination of the management contract.
The luxury hotel which opened doors to guests in January this year, had been operating at around 50% capacity with an average room rate of under Rs 9,000. Only a few of its restaurants and half of its total room inventory were thrown open to the public.
