June 21, 2018 TnH Global 1

Tatas win bid, to check in at The Connaught for 33 years

The heart of Delhi will soon get a luxury hotel with the Tatas checking in at The Connaught for 33 years, by winning the NDMC auction bid on Wednesday. The prime central Delhi property was closed in 2013, after the previous operator ran it for 18 years without an NDMC licence. With the 1987-era Connaught, the number of Taj Hotels under various brands in Delhi-NCR goes up to 15. However, Taj did not indicate when the hotel will reopen as it requires extensive renovation.

Indian Hotel Company Limited (IHCL), a Tata Group company which runs the Taj brand, will participate in an auction for another central Delhi hotel, Asian International on Janpath Lane, on Thursday. A question mark hangs over NDMC auction of the prime Taj Mansingh, which is now slated for July 18, but will take place only if three eligible bids are received by July 9.

IHCL will position The Connaught — which has 85 rooms, three banquet halls and swimming pool — as its new luxury brand, ‘SeleQtions’, which is modelled on the lines of Marriott’s Luxury Collection and Wyndham’s Trademark Collection. “We are extremely delighted to win the bid for The Connaught, New Delhi.… It will aptly fit into our new SeleQtions brand, which is a collection of ‘named hotels’ that are unique and one of a kind,” an IHCL spokesperson said.

IHCL will share 31.80% of gross turnover (GTO), or Rs 5.7 crore per annum, with NDMC, whichever is higher, officials said. Senior officials claimed the e-auction yielded more than the double revenue that it was getting from this hotel.
NDMC kept a minimum guarantee fee of Rs 5.86 crore per annum, or 17.25% of GTO, whichever is higher.

“After technical evaluation of the bids by SBICAPs, three qualified bidders — IHCL, Sarovar Hotels and Byke Hospitality — participated. IHCL has been selected as the successful bidder. The e-auction started at 24.5% of GTO and concluded at 31.8% of GTO,” a senior NDMC official said.

The Connaught is built on land allotted for construction of a youth hostel in the run-up to Asiad 1982, with the successful bidders then ending up building a luxury hotel in 1987. NDMC cancelled the hotel’s licence in 1995 and Prominent Hotels Ltd reportedly continued operating it for 18 years till 2013.

NDMC last year decided to auction The Connaught and Asian Hotel, after sealing both in 2015 due to non-payment of license fees. The civic agency’s licence fee dues from Connaught were Rs 120 crore in 2013. It is only now that the civic agency is hoping to generate some revenue from this prime property with Tatas checking in.