Calcutta/Mumbai, Sept. 4: Hotel major EIH Ltd (previously East India Hotels) today signed an agreement with Hilton International for co-branding and joint marketing of nine properties — including two under construction — that would sport the ‘Hilton Trident’ brand.
The agreement covers all the Trident properties — in Agra, Bhubaneswar, Chennai, Cochin, Jaipur, Udaipur and the two under construction in Gurgaon and north Mumbai — besides Oberoi Towers, the Mumbai landmark at Nariman Point, which will be renamed Hilton Towers.
The shares of EIH gained Rs 14 on the National Stock Exchange. It closed at Rs 221.60, 6.74 per cent higher over Wednesday.
The nine hotels that come under the 15-year arrangement for joint marketing have 1,900 rooms in all. The property in Gurgaon is likely to be commissioned in a couple of months, while the one in Mumbai’s Bandra-Kurla complex will be completed in three years.
EIH will be paying a percentage of room sales for the Hilton brand and support in marketing. The re-branding of the nine properties will be completed by March 20004, the company said.
Commenting on the alliance, EIH chairman P.R.S. Oberoi said: “Hilton’s international sales and marketing resources, including sales offices in 34 countries, will provide us with strong international representation in an increasingly competitive market.”
“Trident makes an ideal partner for Hilton as its qualities align closely with Hilton’s own brand values. Trident Hilton hotels represent a strategically important addition to Hilton’s network in Asia and gives us the ability to offer customers choice of nine locations in India,” said David Michels, chief executive of the Hilton group.
EIH, which operates 30 hotels in six countries and four Nile cruisers, will continue to manage the nine properties. The arrangement does not preclude Hilton from operating its own hotels in India either.
The arrangement as it stands now does not envisage any investment in the nine properties by Hilton. The hotels are, at present, owned by EIH or its associates.
The alliance with Hilton does not, however, end the EIH management’s efforts to expand its marketing reach through alliances with international hotel chains.
EIH managing director S.S. Mukherji said: “The company is now looking to enter into a similar alliance with another international chain for its super-deluxe properties that sport the ‘Oberoi’ brand.
“We are currently in discussion with two groups, but agreements of confidentiality prevent me from revealing the names.”
Meanwhile, the EIH management has decided against investing in Morocco, where it had previously planned to set up two properties, following the blasts in Casablanca in mid-May.
“Thank god we did not invest there. The political risks are far too high,” said Mukherji. EIH had previously planned to build two hotels in Morocco — in Marrakech and Casablanca — in alliance with a local group.
The downturn in the hotel industry in the last couple of years had hit EIH hard. “We expect this year to be comparatively better that the last two. We will revisit our expansion plans next financial year,” Mukherji added.