WelcomHeritage, part of the ITC’s hospitality division, which is the largest chain of heritage properties in India is looking at acquiring stake in some of the properties owned by the group. The company which is a joint venture between ITC and the erstwhile Maharaja of Jodhpur, Gaj Singh, has total 64 properties across India, out of which three new were signed on Tuesday in New Delhi.
“We currently operate on the franchise model for all our 64 properties. However, now we are looking at an equity investment in some of the properties,” Rakesh Mathur, president, WelcomHeritage. Mathur said that the company is currently in talks with some property owners in Uttar Pradesh, Madhya Pradesh, West Bengal, North East and Uttaranchal for divesting their stakes by having a joint venture partnership.
Having a JV with the heritage property owner would mean that the company will have a profit-sharing agreement with the hotel owner rather than the current fee based system. According to Mathur, presently WelcomHeritage gets around 5%-8% of the properties’ revenues as fees for services like marketing and branding on a global level, consultancy in restoration related work and assistance in sales among others. The company is targeting revenues to the tune of Rs 75 crore in the financial year ending March 2009 as compared to Rs 60 crore it had in the last fiscal.
Mathur said that company is looking at picking up stakes instead of complete buy-outs as owners are usually averse to the idea of completely giving up their ancestral properties. The 11-year-old company is also looking at entering into management contracts with more properties. “Currently we manage around 5-6 properties, however, we are looking at adding more in the future,” said Mathur. In a management contract, a company takes care of the day-to-day operations of a hotel.
Talking about the expansion plans Mathur said, “We are aiming to have 70 properties by end of March 2010. With the addition of new three properties, our portfolio now has 64 properties”. Among the new properties signed are Shivavilas Palace at Sandur, 40 km from Hampi; Sirsi Haveli, at the outskirts of Jaipur and Naukuchiatal Resort, which is 30 km from Nainital.
The company, which has properties in 19 states has the most presence in Rajasthan with 19 properties followed by Uttarakhand (8 properties), Himachal Pradesh (6 properties) and Madhya Pradesh (5 properties). “We are now looking at expanding our presence in South India and North Eastern states,” said Mathur. He added that the economic meltdown has not very severely hit the heritage hotel chain with occupancy and room rates remaining at the same levels as last year. “Our occupancy level is 30%-35% on an average and we are meeting targets this year,” added Mathur.