Unique Mercantile to invest Rs 1805 cr in Howard Johnson brand

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Updated: November 01, 2014 5:17 PM

Unique Mercantile India, the exclusive developer of Howard Johnson hotel brand in India for the next 15 years, recently launched the first Howard Johnson hotel in Bengaluru

Sudipta DevMumbai

20141115eh02Rahul Rai

Unique Mercantile India, the exclusive developer of Howard Johnson hotel brand in India for the next 15 years, recently launched the first Howard Johnson hotel in Bengaluru. The company has evolved a new business model and would be investing Rs 1805 crores over a period of five years. Speaking exclusively to Food & Hospitality World, Rahul Rai, executive director, Unique Mercantile India said, “This investment will be through internal accruals. Our cash flow from real estate would go into hospitality. Most of the projects would be brown fields and above. Our wish list is to launch at least one Howard Johnson hotel every six months.”

The 35 projects would see completion by 2022. Four verticals have been created for this – the first will take care of the company’s own land banks, and development of six fully-owned Howard Johnson hotels. “We would also be doing 10 JVs, where the structure is already existing and the owner wants to liquidate his equity to bring enhancement to his property and front line revenues. We will rebrand the property and run the show. Then there are long lease models like in Vijayawada, where we have taken the land from the state government on renewable lease for 99 years. There are four properties we will be taking on long lease model. And we would be doing 15 management contracts in which we will not be investing anything,” stated Rai, adding that the preference will always be virgin markets that have the flair for international brands performing. After Bengaluru, the company is looking at launching the Vijayawada property in the next six to eight months. This will be followed by Lonavala and Jaisalmer. All the properties would be 100 plus rooms.

Pointing out that there is a lot of unstructured hospitality in India, Rai maintained that his company wants to participate in hotel projects that are already existing in markets where there is a huge advantage. “We will help them to expand in inventories, bring it up to brand standards. For instance, a 100 year old property in Lonavala with 82 rooms. We are taking over the property, converting the 82 rooms bringing it up to Howard Johnson standards, adding additional 40 rooms,” he stated. Rai believes that Lonavala being only an hour’s away from Mumbai and Pune, the destination can do exceeding well as a MICE market from Monday to Thursday and a packed weekend market. “We see a lot of opportunities in such projects. So predominantly our model will be joint venture projects, where we will be participating with existing owners,” he added.

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