The Hindu Business Line : Grand Hyatt, the new star coming up in Mumbai

A point that the owner and developer, Mr Arun K. Saraf, makes when asked whether the launch has not, perhaps, been a little late. The city, after all, has added more than a thousand five-star hotel rooms in the past couple of years.

``We are opening in a market that is robust. Hotels that opened in softer markets in the past couple of years had to lower their rates to draw customers. We can look at better rates right from the start.''

The deluxe property will be one of the largest in the country with 547 guest rooms and 147 residences or service apartments in its inventory. It will be owned by Juniper Hotels (P) Ltd, with $25 million each (approximately Rs 113 crore each) from Hyatt affiliates and Saraf Industries, which owns seven hotel properties in the country through separate companies.

While five of these are Hyatt brands, two are independent properties, namely, the Yak & Yet Hotel Ltd in Nepal, and The Grand in New Delhi. The latter was originally a Grand Hyatt property. According to Mr Saraf, both parties, in an amicable agreement, dropped the brand in November 2002.

Queried on the funding pattern of the Rs 650-crore property in Mumbai, Mr Saraf said apart from the $50 million (approximately Rs 226 crore) investment in Juniper, $20 million (approximately Rs 90 crore) of funding was drawn from lease deposits or advance rentals from the shopping plaza planned in the hotel. The rest was in the form of loans drawn from financial institutions.

Sticking with their model for developing Hyatt hotels, the Saraf family would own the property while Hyatt International would be the operating company, providing marketing, branding and management services.

The relationship between the Sarafs and Hyatt began in 1981 with the launch of the Hyatt Regency in Delhi. Today, the two run four Hyatt Regency properties (in Delhi, Kolkata, Mumbai and Kathmandu). A feature of the latest property in the city, said Mr Saraf, was the "mixed-use development" pattern of the 10.5-acre property. The strategy, aimed at negating the vagaries of the travel industry, is focused on developing diverse revenue streams through the offer of a range of products, such as service apartments, a shopping mall and convention centre.

On future projects, he said the family concern was keen on setting up properties in the South, specifically in Chennai and Bangalore. Chennai, he emphasised, was an upcoming market, which held promise for the development of five-star properties.