St Regis to manage Palladium hotel

MUMBAI: Pallazzio Hotels & Leisure's 390-room Palladium Hotel in central Mumbai will soon turn into a St Regis, as the iconic hotel brand has bagged a deal to manage the property , ac cording to two people close to the development.

“The management contract with St Regis was finally inked about a month ago,“ said one of the sources. ET had reported in October 2013 that St Regis was in talks to manage the hotel atop the Palladium luxury mall The property is a unit of Atul Ruia-controlled Phoenix Mills.

The hotel was earlier managed by Hong Kong-based Shangri La Hotels and Resorts. In September 2013, Pallazzio Hotels and Shangri-La mutually decid tract, just nine months after the hotel became operational.

Since then, Pallazzio Hotels has been in talks with international hotel chains, also including Marriott, Hyatt and the Intercontinental Hotel Group, for a management deal. Starwood Hotels & Resorts Worldwide, which owns St Regis as well as brands such as Le Meridien and Sheraton, had to pay key money — an upfront payment usually made in long-term deals to manage marquee properties — to win the contract, said the person.

“Starwood has paid over Rs 25 crore as key money,” said the person. Since the deal involved this payment, it took time to work out the commercial part of the contract, he said.

Romil Ratra, group director of hospitality at Phoenix Mills, and a Starwood Group spokesperson said they can’t comment at this point of time.

According to experts, in this case the key money was paid to bag the management rights of an operational property at a central location in Mumbai.

The Mumbai St Regis would mark the debut of Starwood’s luxury brand in India.