Hyatt Regency closes ‘temporarily’ in Mumbai
MUMBAI: The Hyatt Regency Hotel, a 400-room, five-star property near the Mumbai International Airport, has announced a temporary closure due to the lockdown-induced cash crunch faced by its owner Asian Hotels (West).
Sunja Sharma, head of Hyatt Hotels India, said that since there was no money coming from the owner to maintain the operations, it was decided to suspend operations till further notice. He added that future reservations for luxury properties through Hyatt's booking channels will be temporarily unavailable.
The closure is the first visible sign of tension between major chains in the hospitality sector in India's financial capital.
US-based Hyatt follows a franchise and management contract model in India where it lends its brands to hoteliers and manages their properties for them in exchange for a fee. Hyatt said the remaining 30 properties in its India portfolio are operational.
"While many hotels closed during the first Covid wave, it was a decision based on low occupancy. They reopened. This situation (Hyatt Regency Mumbai) is not about hotel closure as it is about the owner The hotel appears to have not been paying salaries for the past few weeks while keeping the hotel open," said a hospitality consultant.
Hardeep Marwah, general manager of Hyatt Regency Mumbai, informed the hotel's 'on-roll' employee through a memo that he cannot pay salaries or support works as the owner has stopped investing money. The workforce at 401-key Hyatt Regency could not be ascertained because it laid off employees following the impact on business from the pandemic.
Typically, full-service hotels such as the Hyatt ReginaV Mumbai have a staff-tourroom ratio of 1.2:1.
Sharma said the chain is working with Asian Hotels (West) to rectify the situation. In February, Sushil Kumar Gupta, chairman and MD of Asian Hotels (West), resigned from the company, which reported a loss of Rs 109 crore for the nine months of FY21. Ten days ago, Asian Hotels (West) informed stock exchanges that it had defaulted on loan and interest payments to Yes Bank. The total outstanding borrowings stood at Rs 263 crore.