ITC to Bring Starwood’s Luxury Brand to India

ITC Ltd, which has over 75 hotels in India, will be the exclusive franchisee in the country for the Luxury Collection brand of Starwood Hotels & Resorts Worldwide, Inc., one of the largest hotel companies in the world with about 850 properties. The move concludes a two-year renegotiation of the deal between the two multibillion-dollar companies. The new agreement also brings Starwood’s Luxury Collection brand to India for the first time.

ITC and Starwood formed an exclusive relationship for the Sheraton brand in India in 1979, when ITC had just three hotels. Now, the two companies will be “collaborating as well as competing” in the Indian hospitality market, said Y.C. Deveshwar, chairman of ITC. President of Starwood’s Asia Pacific unit, Miguel Ko, said the company will not limit itself to ITC for its nine brands except for the Luxury Collection. Starwood plans to introduce several of the brands into India within the next two years.

Ko said Starwood will double the number of its hotels in India to at least 38 within five years. He added that Starwood would seek out franchising, management, and ownership opportunities in the market.

Hotel analyst Pratik Dalal of Emkay Share & Stock Brokers Ltd said the new arrangement would benefit ITC because it will still be able to hold on to a Starwood brand. “Any association with Starwood will go far in terms of increasing their market share,” particularly in international business traffic, he said.

Starwood will be handling the international marketing for the seven Luxury Collection hotels that ITC will be managing, including the hotel currently known as ITC Hotel Maurya Sheraton and Towers, while ITC will handle day-to-day operations and management. Three additional ITC hotels will retain their Sheraton branding, while ITC’s New Delhi WelcomHotel will be rebranded as a Sheraton.

ITC plans to invest an additional Rs5,000 crore in the sector over the next five years.

Hospitality consultants HVS International had reported last year that average revenues per available room in hotels in India increased more than 110% to Rs3,765 in the five years ended 31 March 2006.