Carlson to add 30 hotels in India, ties up with PE fund
Carlson to add 30 hotels in India, ties up with PE fund
Sudeshna Sen
500 words
13 October 2007
The Economic Times
English
(c) 2007 The Times of India Group. All rights reserved.
LONDON: Carlson Hotels, the US group that operates the Regent and Radisson chains, is planning to add 30 odd hotels in India in the mid-market segment over the next few years, and has set up a strategic alliance with a new US $1 billion private equity fund to target primarily in India and China.
Carlson Hotels Asia Pacific has plans to expand its Park Inn and Country Inn mid-market brands and economy brands in India in smaller cities and towns, and has tied up with Lotus Hotel Investment Fund, based in London, which is a new fund focused exclusively on the hotel sector in the high-growth markets of India, China and others in the Asian region.
Park Inn is an emerging hotel brand in the Carlson portfolio, with a focus on offering a relaxed environment in the economy category. Country Inns & Suites is one of Carlson's fastest growing, mid-scale hotel brands.
Martin Rinck, President and Managing Director of Carlson Hotels Worldwide - Asia Pacific said: "This is a great opportunity to combine the power of Carlson's world-class hotel brands with the proven expertise of the Lotus management team to maximise the huge potential we see in these markets". Mr Rinck said the expansion would cost $15m-$20m for each hotel, and the group has similar plans for China.
Lotus Hotel Fund is being set up as a Pan Asia specialist hotel fund with a focus on China, India and South East Asia. The alliance will take advantage of surging demand for world-class hotels in the major business and leisure markets across Asia. The alliance will focus primarily on strategic development opportunities in China and India, along with other key growth markets in the region.
The fund targets hotels for development and turnaround, and re-branding opportunities and will partner with global and regional brands to operate them under management contracts. The Fund comprises senior industry professionals with expertise in hotels, Asia, finance and business development. Mr Amarsi was previously CEO and Managing Director of the Singapore-based investment company BIL International Ltd.
Arun Amarsi, CEO of Lotus Hotel Investment Fund, commented: "We are in the process of launching this new fund and are delighted to have Carlson Hotels Worldwide as one of our brand partners to seize the exciting opportunities which we see in markets such as China and India, in particular".
Carlson Hotels Worldwide - Asia Pacific said that it already manages the largest portfolio of hotels of any international hotel group operating in India and is continuing to expand its presence in other key markets across the region, including China, where it has more than doubled its presence over the last four years.
Recent highlights include the opening of Regent hotels in Shanghai and Beijing. Carlson, besides its hotel brands, includes brands like TGIF, Carlson Wagonlit Travel, Regent Seven Seas Cruises, and Carlson Marketing Group.
Analysis by Sean Reilly
India and China present enourmous opportunity for U.S. and other foreign firms. At the same time, these markets are often difficult for foreign firms to penetrate without some form of alliance with a local Indian or Chinese firm. Personal and political connections in these markets can often mean the difference between being highly profitable or not sucessful in the least. As such, it is wise for Carlson to enter into the strategic alliance with Lotus Hotel Investment Fund. Many people think of private equity funds as merely providing capital but often times, private equity funds offer much more in the way of industry expertise or local country expertise. These private equity funds have visibility to numerous other firms in the market and also employ former industry leaders. Surely, Lotus will contribute valuable knowledge and connections that will allow Carlson and the venture in general to be profitable. What Carlson brings to the table is a history of well managed hotels and this is attractive for any private equity firm looking for a return on it capital. Both firms will benefit from this alliance as both firms bring unique qualities to the relationship.