First they sell to Reliance, then we at hospemag.com wish them Goodbye, and now this?
read ITC & EIH to combine hotel biz, become largest hospitality chain
What the hell?
Why would Mukesh Ambani pay so much more than required to keep ITC at bay and then invite them to the dining table?
or was it done to bring ITC on board as a partner and not an acquisition?
According to reports, ITC hotels will be demerged from ITC and merged into a new entity.
WOW! now, Reliance becomes the LARGEST, yes largest hotel chain in India. It does not need to wrestle with ITC, or buy it, the hotels are free from the ITC board and presto, they are market leaders. Does Reliance like to be the largest? yes it does. What does it do best? crowd out everybody else.
Should the Taj be worried?
You bet! Reliance creates a decent amount of business within the group itself, that of course will now go no way near the Taj, but also, this means a larger balance sheet for the new entity, more punch in sales & marketing and more reach - read cities, and depth. With ITC they add budget/economy to the upmarket, upscale Oberois and Trident.
What about Leela? they need funds, so will Taj oblige? will they go the Reliance way too?
Suddenly Nita Ambani coming on the board of EIH doesnt sound that much looney, does it?