Calcutta, Sept. 16: Diversified business conglomerate ITC Ltd has entered into an agreement to manage five hotels owned by West Asia-based Indian businessman Ravi Pillai.
The development comes at a time major hotel chains are betting on management contracts to strengthen their brands and expand business.
As part of the agreement with RP Group Hotels and Resorts, ITC will manage the properties under the upmarket WelcomHotel and mid-market Fortune brands.
Two properties in Kerala and Calicut will operate as WelcomHotel Raviz. The other three — two in Dubai and one in Calicut — will operate as Fortune Raviz. Raviz is the hotel brand of RP Group whose other businesses range from engineering to construction in West Asia, Australia and Africa.
A few years back, Pillai had bought the Kovalam beach resort in Kerala from Hotel Leelaventure. The debt-laden Leela group reportedly mopped up about Rs 500 crore through the deal and is still managing the property.
“The tie-up has been firmed up through a memorandum of understanding between ITC Hotels and RP Group Hotels & Resorts. While the two WelcomHotels are already under a management contract and will be flagged off immediately, the three Fortune hotels are part of the MoU and will be launched subsequently,” according to a statement from ITC.
The company announced that it plans to add several properties through the management contract route.
“On the anvil are an ITC super-premium luxury hotel in Mahabalipuram, a WelcomHotel in Jodhpur, Patna and Chandigarh, and more than 30 hotels under the Fortune brand,” the company said.
ITC operates more than 90 hotels through four brands — ITC Hotels, WelcomHotel, Fortune and WelcomHeritage.
Several domestic hotel majors such as Apeejay Surrendra Group’s Park and EIH are looking to enter into management contracts to sustain business in the current economic slowdown.