Asian Hotels to buy Inovoa, step up four-star play

Asian Hotels (West) is set to acquire a majority stake in Inovoa Hotels and Resorts. The Sushil Gupta-promoted company is currently working out the valuation details and expects to conclude the deal in a couple of months.

Inovoa Hotels, promoted by Sandeep Gupta, Sushil Gupta’s son, plans to establish presence in the premium and mid-market hospitality segment in India. Hillwood Corporation USA, a Ross Perot Jr. company, holds 24% in the company.

Sushil Gupta said the acquisition is in line with Asian Hotels’ focus on building a four-star deluxe hotel chain in the country. “Post acquisition, Inovoa will become a subsidiary company,” he told DNA without divulging financial details.

Inovoa has signed a 20-year master franchise agreement with NYSE-listed Choice Hotels International Inc for the Clarion brand. Sandeep Gupta had earlier told DNA Money that the first 130-room hotel under the ‘Clarion Century’ brand has been recently soft-launched at Bengaluru.

“Two more management contracts have been signed in Lonavala and Greater Noida. We will invest around Rs 60-odd crore in this business and are looking to raise money through private placements,” Sandeep Gupta, who is also executive director at Asian Hotels, had said.

The Inovoa management said the per-key cost for a Clarion branded hotel would work out to around Rs 40 lakh, including the land cost.

Inovoa acquired a hotel site in Pune three months back and is looking to develop a 150-room hotel there. “It’s a 1.5 acre land parcel with all the permissions for building the hotel. However, keeping in mind the saturated Pune hospitality market, the management will take it up at a later stage,” said Gupta.

Asian Hotels has one operational hotel in its portfolio through a long-term association with Hyatt Hotels for the Hyatt Regency Mumbai. Its second hotel is a five-star deluxe hotel in Delhi, which will be operational by 2012.