)
Indian Hotels Company Ltd (IHCL), which runs Taj group of hotels, has exited from a Moroccan five star hotel under its management from December 2012 as the property owner is facing financial problems.
In May 2011 IHCL signed the contract with JK Hotels, a private Moroccan company (hotel owner) to manage the luxury hotel in Marrakech. This was a part of plan to widen the group's overseas footprint and Taj Palace Marrakech is the group's second hotel in Africa (it launched Taj Cape Town in 2010).
Initially the plan was to develop 161 room hotel with 25 grand suites but the owner has been unable to complete the construction due to financial problems, said a source familiar with the matter. Even the management fee was not being paid to Taj Hotels on time, the source added.
"Taj Hotels Resorts and Palaces will cease to manage the Taj Palace Marrakech with effect from September 10. We continue to pursue our individual goals and vision,'' the company said in a statement on Wednesday. "We will be unable to share any more details currently,'' a spokesperson said when asked about the financial issues.
Marrakech is a popular leisure destination amongst European visitors and has also come up a destination for meeting-incentive tours. The city has seen a spurt in luxury hotels in last few years.
IHCL has 125 properties in India and abroad with over 15,000 rooms. It plans to open another 12 properties in current fiscal and add 1500 rooms. Standalone revenue was up a modest 2.7 percent to Rs 1977 crore in FY 2014 and the group reported standalone loss of Rs 590 crore during the same period due to foreign exchange loss and other exceptional items.
The company earned about Rs 126 crore in management fee and certain allowances in FY 2014 which is about 8 percent higher than previous year.
In July the group sold its hotel in Sydney to a Hong Kong based company for about Rs 180 crore. The divestment has been undertaken as part of the Taj Group's strategy to focus on markets which are core to group's operations, and to create liquidity to fund the company's ongoing expansion in such markets. Asia Pacific and particularly China have been identified as targets for expansion, the company said in July.
