The capital’s hospitality market is abuzz with ongoing auctions this year. Several properties under New Delhi Municipal Corporation (NDMC) have either already been put under the hammer or are in the fray for being auctioned in the imminent future.
Taj group bags the rights to operate The Connaught, plans to launch a new brand
Only a few days ago, Indian Hotel Company Limited’s (IHCL) Taj Hotels acquired the license to operate the Connaught. The central Delhi hotel, owned by NDMC, was once again put under the hammer for a lease period of 33 years, after a failed bid to attract a buyer in the previous attempt. The hotel was sealed owing to non-payment of INR 140 crore in the license fee. The Taj group won the e-auction to operate The Connaught – which features 85 rooms, 3 banquet halls, and one swimming pool – and will pay a sum of INR 5.68 crore each year or 31.80 percent of Gross Turnover (GTO), whichever is higher. The Taj group will unveil a new brand named SeleQtions at the property and in the process look to further cement its presence in the Delhi/NCR market.
Asian International Hotel now under Bloom Hotels
After having been sealed by NDMC, owing to the failure in paying a license fee of INR 56 crore by the erstwhile management, the corporation managed to successfully auction Asian Hotel. Previously known as the Asian International Hotel, also located in the central district, was handed out on lease for a period of 33 years in 1977 for a license fee of around INR 35000 rupees per month. The lease expired in 2007 and NDMC had demanded a sum of 35 lakhs per month to renew the agreement, subsequently agreeing to settle for a sum of 2.5 lakhs per month. The property, however, was sealed by the government body in 2015 as the management did not pay the fee.
Only three parties had qualified for the most recent bidding – which included Byke Hospitality, Imperativ Hotels, and Indian Hotel Group (IHCL). Imperativ Hotels, which owns Bloom Hotels, acquired the license to operate the hotel for a lease period of 33 years. NDMC had pegged the price at INR 1.19 crore per annum or 39.5 percent of Gross Turnover (GTO) whichever was higher.
For the uninitiated, Asian hotel was once successfully auctioned before, for a sum of INR 45.5 lakhs per month. However, the bidder later refused to take the property, forcing NDMC to go for a fresh round of bidding.
The iconic Taj Mahal at Mansingh road up for grabs
The iconic Taj Mahal Hotel on the Mansingh road is up for grabs too, with a minimum reserve price of INR 34 crore. The Taj Group operated the property from 1978, with a lease period of 33 years. The lease to operate Taj Mahal Hotel had expired in 2011 but NDMC had been entangled in a legal battle with IHCL. IHCL had moved to the supreme court, seeking its intervention to resolve the matter but the apex court had refused to mediate between the two disputing parties, forcing IHCL to withdraw its petition. The Taj Group had thus expressed “confidence in its credentials” and suggested that it was keen to partner with NDMC to ensure “the success of the iconic hotel”. The Taj group is expected to come out all guns blazing to re-acquire the landmark property.
ITDC to disinvest Hotel Ashok
Arguably city’s the first five-star property, Ashoka hotel, operated by ITDC, a public-sector undertaking, will be leased out. NITI Aayog had suggested a long-term leasing of the building premises, for a period of 60 years, eyeing participation from serious bidders, as the property requires a massive facelift, entailing huge costs. The hotel boasts of 550 rooms and 162 suites and is spread across a 25-acre property. ITDC is expected to appoint an advisor to undertake the process. Once approved by the Cabinet Committee on Economic Affairs (CCEA), it is likely that DIPAM and tourism ministry would roll out the bid.
Historic Town Hall to be converted into a heritage hotel
The historic Town Hall built originally in the 1860s, in the Victorian-era architecture, and once the seat of the Municipal corporation of Delhi (MCD), is also expected to be leased out and converted into a heritage property, on the condition that the original structure is not tampered with, as per media reports. Given that it is a grade-1 structure – the highest ranked heritage building and mandates that there would be no change in the original façade and structure – NDMC has put in place additional clauses to maintain its sanctity. NDMC has mooted a lease for 33 years on an “as is where is” basis for a sum of INR 1.96 crore per year.
These properties aside, there are a few other hotels which may witness a similar fate in the times to come. With the license to operate Le Meridien being revoked by NDMC because of non-payment of dues amounting to INR 520 crores, it may also go for an auction in times ahead. NDMC is also re-determining the license of The Lalit as the lease had expired in 2014. The Lalit hotels had moved to court for redressal of the issue. The matter remains sub judice.
