Taj, Oberoi Offer $6,750 Suites to Lure Tourists After Attacks in Mumbai

India’s luxury Taj and Oberoi hotel groups will open their flagship Mumbai properties in the next quarter with $6,750-a-night suites and butler services to win back tourists a year and a half after deadly terrorist attacks.

The Mumbai Oberoi will charge as much as 300,000 rupees ($6,750) a night, or double the tariff before the attacks, from April 24. The Taj Mahal Palace & Tower will rent Presidential suites for at least 350,000 rupees a night from September, said Nikhila Palat, a spokeswoman for the hotel.

Spending by overseas tourists in India slumped for seven straight months after terrorists in Nov. 2008 killed 166 people in gun and grenade attacks that forced the hotels to shut for rebuilding. Oberoi Hotels & Resorts plans to open properties in New York, Paris and China after completing the $40 million makeover in India’s financial capital this week.

Renovation “has taken huge amount of our concentration, once we get this open then we will say, now where are we going?” Liam Lambert, president of the hotel chain said in an interview yesterday. “Any brand, whether it is Hermes, Gucci or Prada they have operations in London, Paris, New York, Tokyo.”

The group led by Prithvi Raj Singh Oberoi plans overseas luxury properties as occupancy levels rebound in the U.S. and Europe after the deepest recession since World War II. Room prices may follow next year, according to Patrick Scholes, an analyst at Friedman Billings Ramsey & Co. in Arlington, Virginia.

Priciest Hotels

The most expensive U.S. hotels had the lodging industry’s highest occupancy rates during the first quarter as demand for rooms above $200 started to recover, according to Smith Travel Research Inc. Occupancy at the priciest luxury hotels climbed to 63.1 percent from 57.1 percent in the year-earlier period, Smith Travel said on April 19.

Oberoi charged guests 150,000 rupees for the 1,600 square foot Presidential suites before the attack. The hotel increased size of the suites to 2,050 square foot rooms, which will include quarters for guests’ security officers.

EIH Ltd., Oberoi’s parent, added 3.8 percent to 130.45 rupees at 10:56 a.m. in Mumbai, the biggest gain since Nov. 26. The stock has declined 5.8 percent in Mumbai trading this year, lagging behind a 8.6 percent advance for shares of Indian Hotels Ltd., operator of the Taj brand.

Terrorist Attacks

Terrorists entered the luxury hotels, a railway station, Jewish center and tourist cafe on Nov. 26, 2008, spraying bullets and throwing grenades. Twenty-five days later, part of the Taj Mahal and the Trident Hotel, adjacent to the Oberoi, reopened. The gutted Heritage wing of the Taj Mahal on the Colaba waterfront will open on July 1, said Vice President Karambir Singh Kang, who lost his wife and two children in the fire started by the attackers.

“Both these hotels were built many years ago -- the Oberoi was built 20 years ago and the Taj over a hundred years ago,” said Manav Thadani, managing director at HVS International based in New Delhi, which advises clients looking to start hotels in India. “Today’s luxury traveler is all about more space. These renovations have been a great opportunity to address the issue.”

The Taj Mahal, which unveiled a marble memorial in the lobby for the 31 guests and staff who died in the attack, has boosted security and added luxury suites by joining rooms, Kang said. The Taj Group added x-ray machines and metal detectors to screen guests while newly installed barriers prevent vehicles from pulling up to the entrance.

Increased Surveillance

The Oberoi also used the opportunity to complete renovations pending since it opened in 1986, said Ketaki Narain, director of corporate communications at the group.

“Every hotel needs refurbishment every seven years, and then you need a thorough renovation after 15 years,” said HVS’s Thadani. “It’s always a tough call deciding when to do renovations, because you have to close down the hotel and there’s a loss of business.”

The Oberoi, which will have 10-times more surveillance cameras than before the attack, sniffer dogs and x-ray machines, has 37 bookings for next week, Lambert said. The company renamed its Tiffin restaurant, where diners were shot in the first hours of the attack, to Fenix following a naming contest among its employees.

The 14-level atrium lobby at the hotel is decked in marble shipped from the Greek island of Thassos and chosen by Prithvi Oberoi, the son of the chain’s founder, said Lambert, who joined the group last year from the Mandarin Oriental. The 24-hour Oberoi-operated spa will include Balinese massages and Hungarian body wraps, according to a statement.

Oberoi Hotels, founded by Prithvi Oberoi’s father, may acquire properties in the U.S., France or China or manage it for developers, Lambert said. Mohan Singh Oberoi started the chain in 1934 by buying the Cecil hotel in the hill-top town of Shimla, where he worked as a bell boy.

To contact the reporters on this story: Ketaki Gokhale in Mumbai kgokhale@bloomberg.net

Enlarge image

The Taj Mahal Palace and Tower hotel

Prashanth Vishwanathan/Bloomberg

A file photo shows Security forces personnel watching as a fire rages in the Taj Mahal Palace and Tower hotel in Mumbai.

A file photo shows Security forces personnel watching as a fire rages in the Taj Mahal Palace and Tower hotel in Mumbai. Photographer: Prashanth Vishwanathan/Bloomberg