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01st October, 2013.
Swimming Pool Side of Leela Mumbai

Leela parts ways with Kempinski Hotels

After being together for nearly 25 years, Leela Hotels, one of India's luxury chains, and the Geneva based Kempinski Hotels, a luxury hotel and marketing group, have parted ways.

The Mumbai based Leela has dropped the Kempinski brand name from all its properties, except for the 322-room Gurgaon hotel, a managed property, and the Leela Residences Gurgaon, of mall-cum-residences.

Leela Palace, Hotels and Resorts, the umbrella entity for all its seven operational hotels and three under-construction properties, has been looking to chart its own growth strategies sans its marketing partner, Kempinski.

All of Leela's properties (at Mumbai, Bangalore, Goa, Kovalam, Udaipur and New Delhi) have been displaying the Kempinski brand.

The newest property, due to come up in Chennai, a 326-room, sea-facing hotel, will come up under the Leela brand. Similarly, the Mumbai property, oldest in the portfolio, has been rebranded to 'The Leela Mumbai' from 'The Leela Kempinski Mumbai'.

The marketing alliance with Kempinski Hotels has been on since 1987, when the Mumbai property was opened for guests. All the Leela Hotels were promoted internationally by Kempinski Hotels. These will now be promoted by Leela itself.

Rajiv Kaul, president, The Leela Hotels, Palaces and Resorts, said, "We have had a very frutiful relationship with Kempinski over two decades. For future growth opportunities, the company was required to set up its own marketing and distribution system".

Kaul added, "This is an important component for future expansion. This has allowed us to set up our very own network. We are also a part of the Global Hotel Alliance."

This would be the second such noted instance in India's hospitality industry where a home-grown brand decided to part ways with a popular international brand to chart its own growth.

A few years earlier, The Lalit Suri Hospitality Group, which operates as Bharat Hotels, decided against renewing the management contract with Intercontinental Hotels Group and split with the US-based firm to form its own brand, 'The Lalit'.

"We operated with the 'KI' code which is the Kempinski code till December 6, 2011, and on December 7, we started with the 'LR' code, which is the Leela Hotels code,"added Kaul.

The latest move by the Nair family's Leela Group is seen by market watchers as a step towards being independent in operations.

More than half its guests are international travellers, with the percentage going as high 90 per cent during peak seasons in properties such as Goa.

A company source said, "After operating in partnership with Kempinski, we have reached the point in marketing where we believe we could afford to have our very own distribution system. We have made inroads into the global distribution system over the years. It has been two months since the new system is in place and the managers state the market response is very impressive."

Kempinski Hotels, though, will keep marketing Leela's inventory through its channels until the end of the contract, which expires in 2015-16.

The two companies last renewed this contract in 2006. Talks about having an independent system within the Leela Group surfaced in the middle of last year. The company has established sales offices in New York and London.

Source: business-standard.com

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