Despite a long-standing relationship with India that goes back to 1973, Starwood Hotels & Resorts Worldwide is still not a direct investor in the country. The hospitality major has been managing properties and, at present, has 26 properties in the country. Vasant Prabhu, vice-chairman and chief financial officer, in an interview with Shweta Bhanot, has expressed the group’s desire to directly invest in the country and said the company is just waiting for the right partner. Excerpts:
Will we see Starwood infusing capital in the country directly, soon?
There is a lot of investment going on in the country, but our real estate partners are doing those. Starwood has not made any direct investments in the Indian market, as of now. We are primarily looking at managing properties and see growth in it. However, we are not closing the door for direct investment opportunities either. If an opportunity comes our way, we will look into it. India has the potential to become our largest market in the long term. At present, it is smaller than China but has the potential to grow at the same trajectory like China. We want to introduce all our nine brands in India.
So, will it be through joint ventures?
We own many properties around the world and have joint ventures. We have JVs in China, Thailand and the Maldives. We would definitely want to do that in India. We could look at jointly developing properties with a minority stake or enter into a multi-hotel joint venture with 25% stake. Joint ventures could be done with either the existing real estate developers or new players. We are not unwilling to invest in the country, but all depends on finding the right partner and opportunity. But, we do not want to do business like DLF-Hilton JV.
Starwood has a long-standing relationship with ITC. Does ITC’s strategic interest in The Oberoi Group and The Leela Group concern you in any way?
Historically, we had an exclusive arrangement with ITC in the country, which we ended long ago. Today, we have special arrangements with ITC for our The Luxury Collection. However, we are now free to do what we want. ITC has been supportive and has helped establish Starwood in the country. We want to continue working with them. But, that would not mean restricting ourselves to one or two developers. We want to work with all the major real estate developers. As far as ITC’s interest in other brand groups in the country is concerned, it is a hypothetical question and we would have to see how it affects things.
Is the group open to extending co-branding from ITC to other developers?
We are not looking for co-branding. ITC is an exclusive case and we have a long-standing relationship with them. It will be the only one where one will see co-branding happening. Other than ITC, co-branding is not our policy and this is not how we do our brands. The partners are tying up with us because of our brands.