The exclusive deal between PE backed Sarovar Hotels and US-based Carlson Hotels Worldwide has ended, reports Mint. Sarovar Hotels, a budget and mid-market hotel chain had an exclusive franchise agreement for the Park Inn and Park Plaza brands of the Minneapolis, US-based Carlson Hotels Worldwide. About one third of the Rs 600 crore revenue at Sarovar Hotels Pvt. Ltd used to generate from this exclusive agreement. Sarovar will continue to work with Carlson as their non- exclusive franchise partners.
Bessemer has invested (along with New Vernon Private Equity) Rs. 38 crore ($ 8.5 million) in Sarovar Hotels, to build out a chain of budget hotels in India, under the Hometel brand.
Ajay Bakaya, executive director of Sarovar Hotels told Mint that they expected an increase of 50% in revenues in the beginning of this year. The increase in revenue expectations have been revised to about 30% now.
Bakaya also said “2009 is going to be a very bad year generally for the hospitality industry in terms of fee recovery and revenues of hotels. Our room rates currently vary from Rs 2,000 to Rs 12,000, and room rates this year would probably be 10% lower than last year.”