Taj Group of Hotels enters China
January 11, 2012

The Taj Group of Hotels, owned by the Tata Group one of India’s largest businesses, has inked a Joint Venture with Yunnan Tourism Co. Ltd. engaging themselves in the development, construction, operation and management of two hotels in Kunming Expo Garden, situated in Yunnan province of southwest China. The deal will mark the increased presence of India’s finest  hotel chain in China’s fast developing tourist destination.

The JV marks the first such foray into China by an Indian luxury hotel chain. The luxury hotelier already has management contracts for properties in Beijing and the resort island of Hainan, the latest deal paves the way for the company to cement its position in the Chinese tourism industry by getting involved in development, construction and branding of the planned Yunnan hotels.

“It’s the first venture into China by an Indian chain and therefore it’s a benchmark deal,”  said PR Srinivas, lead hospitality and leisure industry analyst at Deloitte told the Financial Times. “They already operate abroad…and they’ve been looking at China for a while so this is a break in the wall for the group.”

The company highlighted the proximity to south-east Asia to India and rising domestic tourism as an incentive to enter the province, which has seen the number of foreign and domestic tourists double in the past six years to 3m and 138m respectively, according to the official Yunnan tourism website.

“[Our] presence in Kunming [the capital of Yunnan province] is critical for our selective global expansion plan because of its strategic location with access to key markets like Vietnam, Thailand, Cambodia, Myanmar, Bangladesh and Laos,”  said Abhijit Mukerji, executive director of the Indian Hotels Company Limited–the umbrella company the hotel chain falls under. “It is a major communication and transport hub in China that has good connectivity with the domestic Chinese tourism circuit. The entry of Taj…brands in Kunming offers an exciting opportunity to establish the brands in the Chinese market.”

Officials in Yunnan welcomed the latest investment by one of India’s most recognisable companies.  Ge Bao-rong, general manager of Yunnan Tourism, said: “We are confident that their expertise of the Indian and international markets combined with our understanding of the Chinese market will be immensely helpful in developing world class hotels…”

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