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Taj Hotels, Resorts & Palaces in
 Talks with Orient Express Hotels
By Meenakshi Verma Ambwani, The Economic Times, IndiaMcClatchy-Tribune Regional News

October 29, 2009 --NEW DELHI -- The Indian Hotels Company (IHCL), twice snubbed by Orient Express Hotels, is still in talks with the NYSE-listed international luxury hotel chain and plans to take its Ginger and Gateway hotel chains abroad as it continues to ramp up international presence.

"We have had some very good meetings with Orient Express executives in the past. But it all depends on the right kind of business environment," said Raymond N Bickson, MD and CEO of Indian Hotels Company, the Tata group firm that owns the Taj Hotels, Resorts & Palaces.

The firm eventually plans to take its budget hotel brand Ginger and mid-market brand Gateway abroad. "Ginger can tap the great potential in emerging economies like China and would do very well in countries in South America and sub-Saharan Africa," said Mr Bickson.

Asked about IHCL's global acquisitions plans, he said it all depends on the opportunities the company gets and added that debt is difficult to raise at this time. The company has also been steadily pursuing an asset-light strategy to expand its luxury Taj hotel chain's international presence. Mr Bickson said the acquisition of an estimated 12 percent in Orient Express was in sync with its move to try to make Taj a global brand.

With four clear sub-brands in its portfolio -- luxury brand Taj, upper upscale Vivanta by Taj, mid-market Gateway and smart basic Ginger -- IHCL has identified 25 "gateway cities" like London, New York, Singapore, Sydney, Doha and Abu Dhabi which attract customers to India, to make its brand visible in foreign markets.

This at a time when 37 international brands (large hospitality conglomerates have dozens each) have either entered the country or are in the process. "All the international brands that are entering India have very strong loyalty programmes that help them drive business to their hotels. We as an Indian hotel company have to therefore protect our business not only in India but also to create a strong international brand presence. This is the reason why we have signed a slew of management contracts with various international developers to take our brand abroad," Mr Bickson said.

The company is aggressively building its room inventory and has been opening almost one hotel every five weeks for the past few years. Falaknuma Palace, which is opening next February in Hyderabad, would be IHCL's 100th hotel. "We are well on target for achieving the target of 20,000 rooms across brands," Mr Bickson said. The firm has around 12,000 rooms.

Rather than an omnibus and confusing Taj brand across price points, the group has positioned its chains in a clutter-free manner.


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