Management contract of The Gateway Raipur set to end next month; Sayaji Hotels to take over
The Gateway Hotel at Raipur in Chhattisgarh will be the first casualty after Tata Group's hospitality venture The Indian Hotels Co Ltd (IHCL) unveiled a new brand architecture this month.
The Raipur hotel was going off the IHCL network post April 1, 2017, an IHCL source said.
"The management contract tenure was coming to an end and it's not getting renewed," the executive said. On the market talk of Gateway hotel at Surat following suit, the official said, "That may not be the case."
This development could pave the way for more management contract exits from the Taj network of hotels that has set a December 2017 deadline to migrate all the Vivanta and Gateway properties to Taj branded hotels.
IHCL executives did not respond to DNA Money queries on the development. An email to hotel company's media agency seeking comments and related details went unanswered.
Though the management contract between Taj and Vicon Imperial (the asset owning company) for this 121-room hotel built on 3.5 acre was signed in 2007, the property got operational only in March 2014. With the tenure coming to an end on March 31, 2017, management of the Raipur hotel has now been taken over by another BSE-listed company Sayaji Hotels Ltd.
Interestingly, in November 2016, The Gateway Hotel Raipur was put on the block for e-auction by Tourism Finance Corporation Ltd (TFCI) and YES Bank, lenders to Vicon Imperial. Both TFCI and YES Bank had an outstanding of Rs 32.2 crore and 36.28 crore, respectively on the property as on April 30, 2016. The reserve price set by the lenders was Rs 80 crore.
DNA Money could not ascertain if Sayaji Hotels has also acquired the hotel in the e-auction. Its managing director Raoof Razak Dhanani did not respond to calls and text messages.
The Taj group currently operates 101 hotels across India and a few international markets. Of these 27 hotels are operated under The Gateway brand and 31 under Vivanta. The balance hotels are a mix of brands sporting the Taj name as well palace hotels under their individual names in addition to resorts and spas, and a few wildlife properties.
On future exits arising out of the new brand architecture, industry experts said while hotels owned by IHCL (directly or through its subsidiaries and associates) may not go off the network, it is the management contracts that may pose the risk. According to IHCL's annual report for 2015-16, there are 29 hotels under the management contract, of which 13 are Gateway hotels and eight Vivanta branded hotels.
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IHCL executives did not respond to DNA Money queries on the development. An email to hotel company's media agency seeking comments and related details went unanswered.
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