The India-based Taj hotels group has confirmed its sale of Blue Sydney to the owners of the fast-growing Ovolo brand.
The $32 million sale, to Hong Kong-based Hind Hotels and Properties Group, represents Taj’s exit from the local market. The transaction is scheduled to be completed by October 31.
It is the third Australian acquisition for Ovolo in just over four months. In March it acquired Oaks on Lonsdale, now operating as an Ovolo. In May it confirmed it had bought the boutique 1888 hotel in Pyrmont, Sydney from 8Hotels – providing it with a foothold in the Harbour City.
Ovolo founder and chief executive Girish Jhunjhnuwal highlighted 2014 as a “significant milestone” for the brand with its acquisition of three hotels outside Hong Kong.
“The purchase is part of an aggressive brand expansion strategy across Australia,” he said. “They presented a unique opportunity for us to reinforce our presence in the Australian hotel market.”
Meanwhile, Taj revealed the decision to sell as part of its strategy to focus on core markets.
“This decision is in line with ourgroup strategy to focus on key markets for now, that are critical to the group's operations,” managing director and chief executive of parent firm Indian Hotels Company Raymond Bickson said.
“The hotel has a wonderful track record of high occupancy, a stellar list of industry awards and has set new Australian benchmarks for environmental practices.”
Just over two years ago, the hotel group had been seeking to strengthen its Australian presence.
At the time, Bickson confirmed to Travel Today that a luxury property in the Victorian capital was next on the agenda in order for it to benefit from corporate travel between Melbourne and Sydney.
“Probably about 60% of corporate travel in Australia is between those two destinations,” Bickson said.
"Not having a flag in Melbourne impacts our ability to leverage off that and get more of that business. You can’t be in one without the other if you want to have a successful operation.”
But he admitted the group had been struggling to find the right property in a suitable location.
Meanwhile, Taj insisted that the sale of Blue Sydney “does not reflect any diminution of the group’s interest in the Australian market”.
Australia is the fifth largest source market for Taj Hotels, Resorts & Palaces, it confirmed, with Australian outbound business remaining a “high priority” for the group.
