Tatas' Taj Hotels pulls out from Morocco luxury hotel

Tata group-run Indian Hotels Company Ltd(IHCL) has pulled out from managing Taj Palace Marrakech in Morocco just two years after it bagged the deal to manage the 161-room five-star hotel.

In May 2011, Indian Hotels inked a pack with JK Hotels, a private Moroccan company, to manage the luxury hotel in Marrakech as part of the company’s plan to widen the group’s overseas footprint.

“Taj Hotels Resorts and Palaces will cease to manage the Taj Palace Marrakech, owned by the private Moroccan company, JK Hotels, with effect from 10 September 2014,” Indian Hotels said in a statement.

“We continue to pursue our individual goals and vision. We wish JK Hotels all the very best for the future,” the statement added.

According to a report in the Business Standard, IHCL’s initial plan was to develop the hotel with 25 grand suites but the owner was unable to complete the construction due to financial problems, following which even the management fee was not being paid to Taj Hotels on time.

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This is the second time that Taj is pulling out of an international property this year. In July, it sold the 100-room Blue Sydney hotel in Australia to Hong Kong’s Ovolo Group for Rs 180 crore.

Last year, the company dropped its plan to buy Bermuda-based Orient-Express Hotels, after pursuing the offer for over a year.

Earlier this year, Raymond Bickson quit as MD & CEO earlier this month. The company’s consolidated net loss widened to Rs 34.82 crore in the quarter to June from Rs 19.09 crore a year ago. Revenue, however, rose 3.1 percent to Rs 937.46 crore. Overseas operations contribute almost 40 percent of Indian Hotels’ revenues. The company has been in the red for the past few years mainly due to the losses incurred by its overseas operations amid the global economic downturn.