Mumbai: Leela Hotel scion Amruda Nair’s new venture Aiana Hotels & Resorts will introduce the concept of fractional ownership in the hospitality business at its first hotel in India. Aiana is scheduled to open its first property in India, Aiana Munnar, a villa resort in Kerala, in 2016.
Through fractional ownership, a single asset can be owned by multiple people. In other words, a person or an investor can either own an entire villa or a fraction of it. Over 15 high net individuals and non-resident Keralites, particularly from the Middle East, have already invested in the Munnar hotel, said Nair.
“The reason why we are keen on fractional ownership in India is because there are people who are looking to invest in an asset. The model provides an option for each investor to own a fraction of the built-up area and a divided portion of the land around it. So it’s the title that you own and you can transfer and even your kids can inherit,” said Nair, who is currently joint managing director and chief executive officer, Aiana Hotels & Resorts L.L.C.
The model gives the hotel developer easy access to funds, while the ultimate owners get as an opportunity to use their fraction as a holiday home or earn revenue out of their share of ownership, she added.
Aiana Munnar, spread across 20 acres of land with 33 rooms, is owned by Moonriver Resorts & Spa, Munnar, founded by designers Alex and Tsarina Vacha. Earlier this month, Aiana entered into an agreement to manage the resort. Aiana is also in the process of developing a hotel in Doha, which is expected to be operational by early next year.
Fractional ownership is a concept which developers of second homes have tried in the past, said a consultant to the hotel industry, adding it hasn’t always worked.
“It is a fairly new concept in the hotel industry in India. Globally, there are number of hotel chains and resorts which are running through this model. In India, Sterling Holidays tried to adopt the model but it didn’t work out. So it’s yet to be seen how it can work out in the country,” said Gulam Zia, executive director (advisory retail and hospitality) Knight Frank India, a property consultant.
Zia said owning a residential property is a “touchy” subject in India. Sharing a property with multiple owners was seen as confusing, which limited the interest in the concept.
However, globally, such models have succeeded; so, one needs to push a bit to make it successful here, said Zia.
Nair said she plans to replicate the fractional ownership model across other resorts the company plans to launch over next five years. These properties will be spread across holiday destinations both in Kerala and Karnataka.
“In our first phase, we wanted to have a strong presence in South India and are looking for weekend destinations. Everything is there from beaches, plantations, religious destination… So, there is enough of a variety,” she said.
Aiana is planning around seven properties in the Middle East and the southern part of India in the next five years. In its second phase, it plans to enter north India and other south east Asian countries.
The 32-year-old granddaughter of Capt. Krishnan Nair, founder of the Leela Group of hotels, said Aiana will be completely independent and different in terms of its service and positioning from the Leela Hotel. She branched out independently from the Leela where she was earlier working as head of asset management.
Aiana Hotels was formed earlier this year as a joint venture between Nair and Sheikh Faisal Bin Qassim Al Thani, chairman of Qatar-based asset management company Al Faisal Holding.
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