Hospitality

Luxury hotel brands swap keys in India’s economic slump

MUMBAI

Less than nine months after opening the first hotel in Mumbai under its brand, Hong Kong luxury chain operator Shangri-La Asia handed the keys back to the owner.

Now, U.S.-based Starwood Hotels & Resorts Worldwide Inc is in talks with the same owner to take over management of the property under its St. Regis brand, people familiar with the matter said, part of a shake-out at the luxury segment of India’s ailing hotel industry.

Slowing economic growth and an oversupply of new hotels conceived during the boom years of 2006 and 2007 have led to falling room and occupancy rates in India, straining relationships between hotel owners and the global chains brought in to run them.

But while some global operators are leaving, others like InterContinental Hotels Group, Hyatt Hotels Corp and Starwood are jumping in, using the now unbranded hotels to accelerate their expansion in a country they believe has long-term potential.

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