The roller-coaster ride of Hyatt Hotels in India does not cease to amuse me. While I have enormous respect for the chain’s operations in India, which is limited compared to Marriott, the chain can’t seem to catch a lucky break for a while.
Hyatt lost Park Hyatt Goa to ITC Hotels. The Hyatt Regency Delhi was taken off the network due to financial troubles and is in Bankruptcy Court now (somehow, it still uses the Hyatt brand name). Hyatt Place Rameshwaram was deflagged.
Hyatt Regency Mumbai Shuts Down indefinitely.
Hyatt Regency Mumbai, the airport property of Hyatt at the Mumbai Airport Terminal 2, today noticed that the property had been shut down until further notice.
As you can see, the notice, signed by the General Manager of the hotel, reads,
This is to inform all the on-roll staff of the hotel that no funds are forthcoming from Asian Hotels (West) Ltd., the owner of Hyatt Regency Mumbai, to enable payment of salaries or to support the operations of the hotel. As a consequence, the decision has been taken to temporarily suspend all operations for Hyatt Regency Mumbai with immediate effect. The hotel will remain closed until further notice.
On trying to book a room at the hotel, it shows not available for Hyatt Regency Mumbai.
On reaching out to Hyatt, Sunjae Sharma, Vice President & Country Head – India for Hyatt, made the following statement,
As a result of no funds forthcoming from Asian Hotels (West) Ltd, the owner of Hyatt Regency Mumbai, to sustain the operations of the hotel, a decision has been taken to temporarily suspend all operations for Hyatt Regency Mumbai. The hotel will remain closed until further notice.
Future reservations through Hyatt booking channels will remain temporarily unavailable.
At Hyatt, our guests and colleagues are a top priority, and we are working closely with the hotel’s owner to resolve this situation.
On enquiring about the status of existing bookings at Hyatt Regency Mumbai, I was informed that these were being transferred to Grand Hyatt Mumbai.
It turns out, Asian Hotels West, the owner of Hyatt Regency Mumbai, had also recently defaulted on their loan payments to Yes Bank Limited, as recently as May 29, 2021.
Usually, the hotel is owned by someone. They provide the management contract to a hospitality group such as Hyatt in exchange for a Management Fee charged by the group to manage the hotel, provide their expertise in running it, and offer a global sales network. The eventual profit/loss is transferred to the hotel owner, then. This is called an asset-light model.
However, with how bad things have been over the past year due to CoVid-19, hotels have primarily been empty, and when not, they have had to keep prices very low to get some occupancy. In my conversation with hoteliers in Mumbai, most days, the hotels run 10-12% occupancy, which inches up over the weekends, however the past few weeks, obviously, due to the second wave, this might have also been not true.
The same company also owns JW Marriott Delhi Aerocity (via a subsidiary company, Aria Hotels and Consultancy Services Private Limited). While no impact has been seen on the other property, I’ve reached out to Marriott, which clarified there is no impact of these events on their operations in Delhi.
Update: The owner of Hyatt Regency Mumbai made an exchange filing, where they state that the funds were restricted since Yes Bank did not release them after the company defaulting on its liabilities.
Yes bank has hold all funds including daily hotel collections in the escrow account and the Company/ Hotel are not allowed to make any payment including government taxes (like GST, VAT, TDS, PF, ESIC, etc.), vendors payments, on roll employees’ salaries (more than 300 hotel and corporate employees) and other critical hotel services from the said account. The Yes bank has made some payments from Company’s escrow account, towards Hotel’s Electricity, Water and Gas charges.
Hyatt Regency Mumbai is shut down until further notice, ostensibly due to a lack of funds being supplied by the hotel owner. There is no resolution date to this situation, and in the meanwhile, guests are being accommodated at the Grand Hyatt Mumbai, where existing bookings are made.
My heart goes out to the staff at the hotel who has been excellent in my prior visits to the hotel and my stay there as well.
Have you been to the Hyatt Regency Mumbai?
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