Duet India Hotels, part of the UK-based private equity major Duet Group, is forming a joint venture with InterContinental Hotels Group to roll out Holiday Inn Express hotels in India, according to industry sources.
Duet India Hotels, part of the UK-based private equity major Duet Group, is forming a joint venture with InterContinental Hotels Group to roll out Holiday Inn Express hotels in India, according to industry sources.
A memorandum of understanding has been signed by the two parties and an announcement is likely to be made very soon, sources told DNA.
IHG is likely to take a 24% stake in the yet-to-be-named joint venture while Duet India, an investor and developer of mid-scale hotels, will hold the balance, the source said.
The two firms are eyeing an investment of around $300 million (Rs1,357 crore) for developing about 20 limited-service hotels under the Holiday Inn Express brand.
These hotels will come up across Tier I and Tier II cities wherein the plan, according to the source, is to have over 3,000 guestrooms in the next three to five years.
“InterContinental will invest in this joint venture at an entity level. This development showcases the confidence level in the Indian hospitality market and the willingness of the international hotel chains to actually invest as against management and franchising,” said the source.
An IHG spokesperson said, “The company doesn’t comment on market speculations.” Dilip Puri, chief executive officer, Duet India Hotels Pvt Ltd, refrained from making any comment citing company policy.
DNA has learnt that the JV will take over Duet’s four existing developments in Ahmedabad, Indore, Hyderabad and Chennai. Under various stages of development and construction, these sites have been already acquired by Duet and will be branded as Holiday Inn Express.
In all, these hotels under development will have about 800 guestrooms. This apart, Duet is believed to be pursuing a host of hotel sites and will now work towards acquiring them along with IHG.
Also, Duet is working towards setting up two hotels in Bangalore and Powai, a central Mumbai suburb, under the JV.
A site has been locked in Bangalore and the deal is currently in the final stages. Duet is likely to put up a 180-room hotel under the Holiday Inn Express brand there.
In Powai, the company is pursuing a large land parcel where it plans to set up a 400-room hotel under the same brand. This will be the first time that Duet’s hotel portfolio will be managed by a hotel brand owning and operating company in the form of IHG.
And for the global hospitality major IHG it will for the first time take an equity position through a joint venture towards rolling out a chain of hotels in India.
So far, IHG has only pursued franchise and management contract routes for its portfolio of hotels here.
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