Louvre Hotels Group, Europe’s No. 2 budget operator, will invest over $100 million (about Rs 600 crore) in the Indian hospitality space over the next three years, a top company executive said.
Louvre Hotels was recently acquired by Jin Jiang International Holdings, China’s biggest hotel company, from US investment group Starwood Capital.
“The new owners have asked us to put together a plan to acquire assets in India and grow the brand inorganically rather than organic,” Vimal J Singh, managing director for South Asia at Louvre Hotels Group and Golden Tulip Hospitality Group, told ET. The new management has aggressive investment plans, Singh added.
Until now, Louvre Hotels has grown its portfolio in India through management contracts. “Starwood Capital’s vision was the service business and they were not looking at investments in the hotel space,” Singh said, adding that acquiring assets now will accelerate the growth further. In India, the hotel chain owns brands like Royal Tulip, Golden Tulip and Tulip Inn.
Louvre Hotels’ plan to grow by acquiring assets is unlike the trend in the industry where hotel chains are mostly growing through management contracts.
“The real estate valuation in the country is going to be at the lowest point right now. And because of the issues with the real estate developers, owners and the stress that they have, for various reasons, this might be the right time to enter the market and acquire assets at a better value than we have seen in the past,” Singh said. According to him, the core fund investment plan is being discussed by the new owners and a final plan would be ready in the next three months. The hotel chain would start investing in India by the beginning of the next fiscal.
Singh said the brand is also open to portfolio acquisitions in the country. “That would be the best way to grow the brand rather than growing by single asset acquisition,” he said.
The hotel chain will debut its budget brands — Campanile and Premiere Classe — next year in India. By 2017, Louvre Hotels targets 60 operational hotels in the country. Currently, the brand has more than 1,100 hotels in 47 countries.
According to a recent note by property consultancy JLL, Chinese investors are pumping money into cities that attract Chinese tourists, who are going abroad in greater numbers. Louvre Hotels Group, Europe’s No. 2 budget operator, will invest over $100 million (about Rs 600 crore) in the Indian hospitality space over the next three years, a top company executive said.