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Thursday, September 5, 2013

The Shangri La Vanishes

Opened the HT this morning and saw an ad for some new 'Palladium Hotel' in Mumbai. A closer look revealed that this is the erstwhile Shangri La hotel! Gosh that was quick! The place opened 9 months ago and is already in trouble. A quick google search confirms it - the asset owner (Phoenix mills) and the operator have 'mutually agreed to part ways'.

I was always suspicious of the uber-luxury hotel's location, and will stick my neck out and say location would have played a big role in the hotel's failure. Nothing against Lower Parel - I mean, 4 Seasons is doing fine there - but the exact location of this high-end hotel was pathetic if you ask me. Bang next to a crowded mall (the most crowded in Mumbai I would think), with insane traffic in the few hundred meters leading up to the hotel. Which hotel guest would like to see the hotel in front of their eyes and still spend 30 mins in the car waiting for traffic to open up? Actually the entire Lower Parel area has terrible traffic problems, and the 4 Seasons is probably safe because its location is more Worli than Lower Parel.

The news article says the asset owner was in talks with another operator, but looks like they have had to go solo on this one. I think its a terrible turn of events for them. Without the backing of a global hotel chain, it will be oh-so-difficult to get guests to even know about the existence of this 'Palladium hotel', forget choosing it. And Phoenix is kind of stuck with the high-end positioning at least for a few years because of the amounts they have invested on the rooms. Lets see how they wriggle out of this one. The ad did give me an idea - they are strongly focusing on the restaurants and wedding banquet facilities than on the rooms. Well best of luck to them!

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