Emaar MGF-Accor JV to set up budget hotels for $300 mln

New Delhi, Nov 27 (UNI) Real estate developer Emaar MGF and Accor, global player in budget hotels, here today announced a 50:50 joint venture for setting up formule one brand of budget hotels in metros at an investment of 300 million dollars in the ten years.

In the first five years, the JV company -- Budget Hotels India Private Ltd-- will roll out 50 hotels with a capacity of 5,000 rooms each, while the remaining 50 hotels with the same capacity will be set up during the second phase.

''The company has a two-phase plan to set up 100 hotels with 10,000 rooms space over the next ten years,'' company Executive Vice Chairman and Managing Director Shravan Gupta told reporters.

The company presently has 20 sites available for 10 hotels in major cities, to be operational within two years, he added.

Emmar has sufficient land banks at around 5,000 acres suitable for the development of the project.

In addition, The Indian unit of Dubai-based Emaar Properties may float an initial public offering of its shares next year, Mr Gupta said.

''We see huge potential in the hospitality space and we are moving aggressively in this direction by bringing in products across the value chain. Emaar MGF also has plans to construct 10-15 luxuary hotels for which we have acquired land across the country,'' he said.

''India is a key growth market for Emmar, and we have committed one billion dollar foreign direct investment in the real estate sector to develop several projects across the country,'' said Emaar Properties Chairman Mohamed Ali Alabbar.

Alongside, residential communities and special economic zones, the company regards the hospitality sector as integral in its growth strategy in India, he added.

Mr Gupta said the company is working on ten SEZs across the country for which proposal has been received.

''A mere 16 per cent representation of budget segment hotels in India has propelled us to go in for this project,'' said Accor Asia Pacific Chief Executive Officer David Zalmon Baffsky.

The tremendous movement in travel and tourism being witnessed in the country, progress in the Urban Renewal Mission and the Highway mission has too made the country favourite for investments.

Accor SA Director and Chief Executive Officer Gilles Pellisson said the company, globally, would be expanding to 2 lakh new hotel rooms in five years, out of which one-third of the growth will be in the Asia Pacific region.

Without denying the fact that India will be the priority for this growth, Mr Pellission said the consistency of their products provides them a competitive edge over the other players.

There are very limited budget hotels in India, so our step will be a very great concept.

''Accor is progressing well in the joint venture with Emaar and Interglobe, India's leading tourism company and will be making 40-50 hotels in 7-8 years with an equity investment of 100 million dollars,'' Mr Baffsky added.

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