Realtor Eros to end tie-up with InterContinental

New Delhi-based real estate major Eros Group is calling off its association with global hospitality chain InterContinental Hotels Group (IHG).

Eros, which already has a management contract with IHG for its five-star deluxe hotel at Nehru Place called InterContinental Nehru Place will gradually move out of the IHG network.

Eros Group officials could not be reached for an official comment, however, an IHG spokesperson confirmed the development while abstaining from sharing details on the possible impact it will have on IHG’s India revenues.

“We have agreed to the earlier discontinuation of the hotel management contract due to expire in 2012 for the InterContinental Nehru Place,” said the spokesperson.

This apart, two other developments being planned by the realtor (Eros Group) in New Delhi’s Mayur Vihar area will no longer be part of IHG’s current development pipeline.

The IHG spokesperson confirmed saying, “A mutual agreement has been reached as well to discontinue the development projects for the InterContinental and Holiday Inn Mayur Vihar with the hotel owner.”

The official added that agreements are being formalised and that the hotel chain will work with the asset owner to ensure a smooth handover of the operations targeted for middle 2011.

While there are market rumours about Eros approaching Hilton Worldwide for a possible brand and management assocaition, an industry source said that the realtor is still in discussion with a couple of international hotel chains and that nothing has been finalised as yet.

Among Eros’ other hotel developments include the five-star luxury Shangri-La’s Eros Hotel centrally located in the historic government district in New Delhi.

Parting of ways with Eros Group is the second such setback for InterContinental Hotels Group (IHG) which claims to be world’s largest hotel group by number of rooms.

In September 2008, DNA had first reported about late Lalit Suri promoted Bharat Hotels Ltd choosing to disassociate some of its luxury hotels acorss the country from the IHG network and re-branding them as The Lalit.

While two properties in New Delhi and Srinagar were renamed The Lalit to start with more such hotels will follow suit post the expiry of their respective franchise agreements with IHG.

In April 2007, IHG management took a decision to discontinue franchising their brands in the Indian market and had said that they will either convert the existing franchisees into management contracts or disassociate after the term expires.

The reduction in their hotels network in India is largely an outcome of this decision by the international hotel chain.

Among initial casualties was their only hotel in Mumbai Holiday Inn Juhu which underwent major renovation and is now part of Accor’s hotel network under the Novotel brand. Another hotel signed by IHG under the InterContinental brand in Pune was dropped by the asset owners (Poonawalla Group) during the economic downturn phase and more so because of the over supply in the Pune hospitality market.

Commenting on the hotel chain’s exisitng development pipeline, the spokesperson said IHG currently has 12 operating hotels and another dozen if them under various stages of development.

“The overall development pipeline is very robust and we are targeting to triple the number of our hotels in India to over 50 properties by 2015,” said the spokesperson.