DELHI: Ending months of speculation, Louvre Hotels Group has acquired a majority stake in Sarovar Hotels and Resorts India.
Spokespersons from both groups did not divulge the details of the deal besides conforming Louvre’s commanding majority stake.
There will be no change Sarovar Group’s management though. It’s brand identity too will not change.
Louvre is the second largest hotel group in Europe and the number one hotel group in China. It became a wholly owned subsidiary of Chinese travel conglomerate, Jin Jiang International after its takeover in February 2015. It now has 1,175 hotels with 100,000 rooms in 51 countries with 6 brands ranging from 1- to 5-star. These are Première Classe, Campanile, Kyriad, Tulip Inn, Golden Tulip and Royal Tulip.
This is the hotel group’s first investment of size in the Indian subcontinent. though it has been present in the Indian sub-continent since 2007 and currently manages 22 hotels under its Golden Tulip Umbrella brand. It has an ongoing 50:50 JV with Vimal Singh to develop Golden Tulip and Royal Tulip brands in South Asia market as well.
“Sarovar is a fantastic platform, very promising for the future, mostly due to the professionalism and the local expertise of its smart team.” emphasises Pierre-Frédéric Roulot, CEO Louvre Hotels Group talking about the acquisition.
Sarovar Group businesses
Sarovar is among the largest mid market hotel chains in India. It has 75 hotels in the premium, mid-range and budget sectors across three brands – Sarovar Premiere, Sarovar Portico and Hometel respectively. Apart from its own hotels, it also manages 10 hotels under the Radisson, Park Plaza and Park Inn brands.
It has nearly 6000 rooms in over 50 cities with a secured pipeline of over 20 hotels in development. Sarovar also has two well established F&B brands, The Geoffrey’s Pub and the Oriental Blossom, and manages the lodging and catering facilities of various institutions in India.
In recent past, the group has also been targeting expansion in Eastern Africa.
Sarovar founder and MD Anil Madhok justified the deal saying that Sarovar needed partners to grow fast in the evolving hotel landscape. The merger with Louvre Hotels will help it expand rapidly in both in India and in Africa. Madhok said that the merger will give it more muscle for distribution and market access to potential markets in the world. “OTA commissions are huge. With the merger, we will be able to renegotiate the commission to our benefit,” he said.
Ajay Bakaya, Executive Director, Sarovar Hotels added that technology and distribution were the biggest differentiators for hotel companies today. Louvre will give Sarovar an edge in both these areas
“Respective hotel owners for both groups will benefit immediately from such synergies including local and international management expertise, world-wide distribution, loyalty programs, sales and marketing initiatives, and procurement services while continuing to benefit from the experience of the local management,” said a press release.
Calling the JV, a strategically significant partnership, Saurabh Chawla, Head of Group Development, Louvre Hotels said that with the deal, the hotels will have a combined footprint in about 44 cities across the country. He said that Louvre was keen to bring more brands into India including the Campanile into India.
Avendus Capital was the sole and exclusive advisor to the shareholders of the Sarovar Group in this transaction.
Musafir Namah Bureau