DS Group to foray into hospitality biz

TOBACCO major DS Group is in talks with international hotel chains for diversifying into the hospitality business. According to sources, the group will enter the hospitality business in tie-up with multiple partners, and is in talks with several international chains such as Carlson, Sheraton and Accor.

When contacted by Et, DS Group managing director Rajiv Kumar said: “We are exploring various models, including joint-ventures, for strengthening our position in the hospitality business.” In tourist places, the group plans to manage the hotel properties on their own. However, for metros and larger cities, it plans to enter into alliances with international hotel chains.

Initially, the group is looking at having properties in Kolkata, Shimla, Gurgaon, Udaipur, Jaipur and Goa. In the bigger cities, the company plans to have 200 bedroom 5 star hotels, it will go to the smaller cities with 60-65 room properties. Though, the company did not divulge any figures, industry sources estimate the overall investment to be around Rs. 400 crore. At present, the company’s only stake in the hospitality segment is Manu Maharani, a resort in Nainital.

DS Group has already acquired a property in Kolkata, and the project is likely to be functional in 20-24 months. However, it is still not clear if for the other locations, the company will go for acquisition of existing properties of build on i8ts own. The ongoing diversifications of business by DS Group, is comparable to the one undertaken by ITC, almost a decade ago. An entry into hospitality will ensure the group’s presence in almost all verticals that ITC is into. DS Group has recently diversified into food & beverages, infrastructure and engineering businesses in a big way. The Rs. 900 crore group owns brands such as Rajnigandha, market leader in the non-tobacco pan masala category and Baba & Tulsi in the tobacco category.