India’s largest two-wheeler maker, the Hero Group recently signed an agreement with Marriott International, U.S. based global operator of a broad portfolio of hotels and lodging facilities, to manage Hero’s first hotel in India. This came after months of deliberations with many international hospitality chains.
The partnership with Marriott is to bring its boutique hotel brand, Edition, into the country, said Pankaj Munjal, managing director, Hero Motors. On Hero’s future in the hotel industry, Munjal said, “We will surely expand with Marriott, but we have to taste success first.” He has synergy plans for the retail, restaurant and hotel businesses of the group. The group operates its retail and restaurant business under the brands Oma and Auma, respectively. Analysts said the Hero Group, with an estimated total land bank of 128 acres (including manufacturing facilities) across the country, is likely to go big on hotels. Munjal is already hinting at a second and third hotel, through unlocking of value in service apartments that he’s planning as the next project, to house expatriates. While he maintained it was too early to talk about future hotel projects, he said there were plans to set up 28 service apartments near the first proposed hotel. The apartments, also to be managed by Marriott, would house expatriates coming down from various parts of the world to work on the hotel project for about six months or so. “These apartments would unlock around Rs 300 crore once we sell these and that money can be used as seed capital for the group’s second or third hotel,” added Munjal.
Of the 23 brands that Marriott International has, five are present in India — Renaissance, Marriott, JW Marriott, Courtyard and Marriott Executive Apartment. The company has planned to launch its luxury brand, Ritz Carlton, in Bangalore by 2014. In India, the chain manages 15 hotels with a capacity of a little over 4,000 rooms and is expected to add another five hotels this year in India. Marriott has tie-ups with several developers for management contracts like the Rahejas, Panchsheel and Viceroy.
