According to industry sources, the race – whenever it commences – could be a face-off between Indian Hotels and ITC.
Though the battle for Taj Mansingh, one of the crown jewels of Indian Hotels Company Ltd (IHCL) may have got longer – with the NDMC shifting dates to complete the auction - the Tata company is firmly ahead in the race. In fact, some of the prospective bidders, including The Leela Group, have already opted out of the auction.
The landmark hotel in Delhi’s tony Lutyen’s neighbourhood had been put on sale after the Supreme Court last year gave the go-ahead to NDMC to conduct auction. Till then the Municipal Corporation had been contending IHCL’s claim to first right of refusal to match the highest bid at the auction. The hotel’s lease had expired in October 2011.
While the auction was expected to get over by January 30, the NDMC in a notice on the third of this month put out a notice saying: “Prospective Bidders are hereby notified that the publication of responses to queries which was scheduled for Wednesday, January 03, 2018 has now been postponed. The responses to queries will now be published at a later date and all other dates will be notified accordingly.” The queries were submitted by December 28, and the Corporation was expected to get back to the bidders by the first week of January.
According to industry sources, the race – whenever it commences – could be a face-off between Indian Hotels and ITC, which owns the ITC Maurya, located less than 7km away from Taj Mansingh. “This is a prestigious property,” a source close to ITC told Moneycontrol. “We are surely evaluating the project,” the executive added.
Executives from the Kolkota-based major visited Taj Mansingh last month and submitted their pre-bid queries with the NDMC. The IHCL too has submitted its queries, say industry sources. “At the moment, it is difficult to ascertain who else will be interested in the property,” says a senior industry executive.
The Leela Group, which was expected to be one of the bidders, has dropped out. “We are not participating in the auction,” an executive from the Group said.
While PRS Oberoi, Chairman of the Oberoi Group, went on record that the company is examining “whether we should bid for the hotel or not,” industry sources say it won’t be surprising if the legendary hotelier decides not to.
The Oberoi Group recently opened its revamped The Oberoi Hotel, just 10 minutes drive from Taj Mansingh. “After spending Rs 600 crore in the revamp, it might not make financial sense for him to go for the Taj property,” said a hotel consultant.
Emailed queries to the IHCL and the Oberoi Group were unanswered till the time of publishing the story.
Many industry players had earlier complained about the strict conditions NDMC had put for prospective bidders. Some of the conditions, like only those owning 500 operational five-star rooms are eligible for the auction, “eliminated 95 per cent of the bidders,” says an executive from a leading hotel brand that was interested. The requirement of having a topline of Rs 400 crore eliminated many of the international brands who mostly limit themselves to managing a property, which means they only earn a share of a hotel’s revenue.Also, as per the present conditions, adds the executive, it will take at least two years for the hotel to make any kind of money. “Apart from the acquisition money, much more will have to be invested if the branding changes,” said the official.