ITC weighs hotel strategy option

Currently, 10 ITC-Welcomgroup hotels are marketed worldwide by the Sheraton Corporation.

ITC is weaving its own plans for the hotels business as US hotel major Starwood Hotels & Resorts has decided to go solo and expand its Sheraton brands independently in India.

Y C Deveshwar, chairman, ITC said, both the companies were firming up their own plans as their agreement would expire in two months. He was speaking on the sidelines of a Confederation of Indian Industry (CII) annual meeting.

Deveshwar said the agreement with Sheraton expired last December but was extended for another six months. "In the meantime both the companies are firming up their own plans," he said. Sheraton's agreement with ITC was an exclusive marketing agreement, spanning over 30 years.

On whether ITC was open to other options, given that Starwood was going solo, Deveshwar said the company would make an announcement at an appropriate time.

Currently, 10 of ITC-Welcomgroup hotels are marketed worldwide by the Sheraton Corporation, which is part of Starwood Hotels & Resorts.

However, the ITC-Welcomgroup portfolio extends far beyond the 10 hotels and consists of over 60 hotels across 50 destinations in India.

ITC entered the hotels business with the Sheraton tie-up in 1975. The first hotel was in Chennai, a property acquired by ITC and rechristened Welcomgroup Chola Sheraton.

The brand Sheraton also extends to a segment of hotel services. ITC launched the concept of a 'hotel within a hotel' by segmenting and branding its hotel services""ITC One, Sheraton Towers and the Executive Club-each catering to different needs of the business traveller.

According to reports, the agreement between ITC and Sheraton could be renewed without the exclusivity clause which would give both the entities the option of expanding independently or in partnership with other brands.

Starwood plans to launch its Sheraton, Westin, W Hotel and St Regis brands across major metros and cities in India. The Le Meridien brand, which was recently acquired by Starwood, will be expanded to 15 from the present eight by 2010.