Hilton-Bharat Hotels Pact Under Review

Hilton International and the Lalit Suri-promoted Bharat Hotels business relationship is under review after bad financial results in the first six months of the current financial year.

Hilton International will be sending the Suris a fresh set of proposals in the next 10 days wherein certain areas likely to be reworked. According to hotel industry sources, there has been a shortfall of about Rs 21 crore in the annual budgeted operating profit figures in the first six months of the current financial year of New Delhi Hilton.

In 1996-97, there was a shortfall of about Rs 12 crore from the budgeted gross operating profit provided by Hilton to Bharat Hotels a fact conveyed to Hilton by latter.

 

Under the management agreement between Hilton and Bharat Hotels, the latter was to retain 40 per cent of annual gross operating profits in each of its Hilton properties.

The unaudited financial results of six months ending September 30, 1997, shows the net profit of the New Delhi property of Bharat Hotels managed by Hilton has plunged to Rs 13.55 crore from Rs 18.36 crore in the previous corresponding period. The figures buttress the claims being made by the Suris that the management contract with Hilton has been proving to be too expensive vis-