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Marriott, Hyatt, Starwood and Oberoi see room for growth along Noida Expressway

Meenakshi Verma Ambwani, New Delhi, The Economic Times

July 25, 2011

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The next big battle among hospitality players is expected to shift to the Noida-Greater Noida Expressway. Current trouble over land acquisition in the area notwithstanding, the 25-km stretch could be the next hotspot for tourism, conventions, glitterati events, nightlife and shopping as several big hotel groups such as Marriott, Hyatt, Starwood and Oberoi, are firming up their plans already.

Analysts expect more than a dozen five-star hotels, with an estimated inventory of around 2,500 rooms to come up in the area, making it the biggest hotel hub anywhere in the country.

"Availability of land in New Delhi to construct future hotels is low. As the most projects on the expressway come under mixed land use category, it has created an opportunity for hotel firms to bring their brands into the NCR region," said Akshay Kulkarni, director-hospitality, Cushman & Wakefield.

Some of the projects that have been already announced include Marriott Hotel, Marriott Executive Apartments and Fairfield Inn. Hyatt Hotels & Resorts will operate Grand Hyatt with 600 rooms on that stretch. Jaypee Hotels is running a resort and plans to build a luxury hotel with 650 rooms. Sources said East India Hotels will also set up an Oberoi along the expressway.

"The number of rooms available in New Delhi are about a tenth of the rooms available in Beijing. Hotels on the expressway are expected to cater to guests from the large supply of commercial and residential complexes coming up on that stretch of land. In addition, tourists arriving in New Delhi and Agra as well as for the Formula One in nearby Greater Noida are expected to create demand in that region," said Navjeet Ahluwalia, senior vice-president, hotel development, Marriott Hotels.

Starwood Hotels & Resorts is learnt to be looking at bringing its luxury brand St. Regis and W in that region. Managing Director, India and Regional Vice-President, South Asia, Dilip Puri, said, "We are in talks with developers to bring more than one hotel brand in that region." But he refused to share details.

Carlson Hotels South Asia executive vice-president, KB Kachru said the company is in talks with developers to bring a five-star property on the expressway.

In addition, hotel companies that were allotted projects by the UP government in 2007 are also likely to construct hotels after the recent Supreme Court judgment. The hotel projects were allotted to companies including Lalit Hotels, ITC Hotels, Taj Hotels, and Park Hotels among others.

ITC is still evaluating whether it would pay three times higher amount to be able to build a hotel on the plots. Some others like Lalit Hotels are not going ahead with its plans to build a hotel and will seek a refund.

"We believe the overall cost of the project would be economically unviable for us. So we will be filing for a refund of our entire money that we had paid upfront for the plot," Lalit Suri Hospitality Group CMD Jyotsna Suri said.

Canadian luxury brand Four Seasons, Intercontinental Hotels' brands, including Crowne Plaza, Holiday Inn and Holiday Inn Suites, are also going to be in the vicinity of the Noida-Greater Noida Expressway. Hotels chains such as MGM Mirage Hospitality, Hilton Hotels India and Hotel Leelaventure are also evaluating options for management contracts.

Ankita Mehta, vice president, hospitality & commercial, Logix Group, said, "The availability of large tracks of land on the Expressway will lead to the development of five star and luxury hotels in the area." Logix Group is developing hotels, which will be managed by Marriott Hotels in that region.

Hotel consultancy firm HVS India said it was tracking 30 hotels where construction has started in Noida and Greater Noida and an estimated 7,000 rooms are expected to come up in the region by 2014-15.

"The commercial and residential complexes need to be developed at the same pace as the hotels as they would create the demand for hotels being built in that region," said Kaushik Vardharajan, managing director, consulting & valuation practice, HVS India. He added that in the short term such a large supply of hotels could create pressure on occupancies as well average room rates.

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