Oberoi In Marketing Tie-up With Four Seasons & Hilton

New Delhi, May 21: | Updated: May 22 2003, 05:30am hrs
The Oberoi group of hotels is tying up with multinational hotel chains Four Seasons and Hilton for co-branding and marketing of its properties.

According to sources close to the Oberois, while the Hilton tie-up is for the Trident chain of hotels, Four Seasons would be associated with the Oberoi brand. However, in Mumbai, the Oberoi Towers would be with Hilton, while The Oberoi would be with Four Seasons.

Sources also said that currently it is a strategic marketing alliance but there is an option for either or both of these chains to pick up an equity stake in the group in the future. What is however undecided is the extent of equity stake that might be picked up, and the formula to decide the pricing of shares.

Four Seasons has chosen to wait-and-watch how the tourism potential unfolds in the country before deciding to buy any equity, according to the sources.

When contacted, a spokesperson for the Oberoi group chose not to confirm these developments, but mentioned that talks with international chains have been on for a while. The management control would stay with the current team under the chairmanship of PRS Oberoi.

The partnership with Four Seasons would cover Oberoi properties in New Delhi, Chennai, Kolkata and Bangalore, besides the one in Mumbai. While properties in the country would be co-branded, negotiations are on over which brand would be mentioned first.

What is however not clear is whether the arrangement would cover overseas properties of the group. While Trident hotels are located in the Saudi Arabian cities of Jeddah, Khamis Mashayt and Makkah, the Oberoi is located in Morocco, Egypt, Indonesia, Mauritius and Sri Lanka.

The upmarket Vilas properties in Agra, Ranthambore, Mashobra and Jaipur are priced at super-premium rates and are averaging low occupancy levels, according to sources.

The fortunes of the Oberoi groups flagship, East India Hotels (EIH), too have been falling. Profit after tax (PAT) has fallen from Rs 123.3 crore in 1997-98 to Rs 35.6 crore in 2001-02. There is a net loss of Rs 1.95 crore for the first nine months of 2002-03.

The tie-up with Four Seasons is expected to give the Oberoi hotels access to the global marketing network of the premium Four Seasons chain and attract the clientele with high purchasing power. Rival ITC Hotels today enjoys a competitive advantage due to the long-standing arrangement with Sheraton.

Sources added that a common team marketing both the Oberoi and Trident brands may have had its positioning issues to deal with. Separating the two could now make marketing more effective.