In a bid to expand its Ramada brand of upper mid-scale hotels in India, Wyndham Group which is headquarted in the US has tied up with Bangalore-based Royal Orchid Hotels to open 10 Ramada hotels across the country.
Royal Orchid will have exclusive development rights for the Ramada brand to manage hotels across Rajasthan, Maharashtra, Andhra Pradesh, Karnataka and Tamil Nadu. Wyndham Group already has 10 properties in India including Delhi, Gurgaon, Mumbai, Jaipur, Varanasi and Goa.
Under the alliance, Wyndham will offer use of the Ramada brand and market the hotels through its international sales network while Royal Orchid will manage the hotel.
The first hotel under the agreement has come up at Bangalore where Royal Orchid’s Hotel Harsha has been brought into the Ramada fold. Royal Orchid has invested Rs 10 crore for renovating the hotel. Royal Orchid will pay a fixed percentage of profits from its Ramada hotels to Wyndham.
“Having a well known international brand name and Indian management makes an ideal proposition in the hospitality industry. With this partnership we are evolving into a management company, “ said Chender Baljee, chairman and managing director of Royal Orchid Hotels. He added the tie-up would see setting up of hotels in Pune, Chennai, Nagpur, Indore, Hyderabad, Jaipur, Coimbatore and Mumbai in the next five years.
Royal Orchid independently operates 11 hotels in Bangalore, Mysore, Pune, Jaipur, Goa and Hyderabad. The group plans to invest Rs 500 crore in the next five years to set up hotels in Delhi, Hyderabad, Jaipur, Mumbai and Ahmedabad among others.
The group is also constructing its first international resort in Dar Es Salaam in Tanzania which would be operational in 2010. Funding for the expansion would be through its internal accruals.
Royal Orchid has debt of Rs 20 crore and has so far spent Rs 150 crore on this expansion. The company added that Rs 100 crore will be from reserves and Rs 250 crore will be through debt.
Royal Orchid in addition to this expansion also has a budget offering - Peppermint.
The Wyndham group operates 850 Ramada hotels in 45 countries and is looking at expanding its presence in India. “We are right now working on the franchise model to bring our midscale and economy brands to India, “ Said Oliver DuPont, senior vice president International development, Wyndham Hotel Group International.
