Reliance Industries and Oberoi Group’s Joint Hospitality Venture, Does This Mark The Foray Of Reliance Industries In the Hotel Business?

Reliance Industries Chairman Mukesh Ambani has been at the forefront of a diversification spree that has seen the company transition from its core oil business to telecom, retail, green energy, and now, possibly, the hotel industry. 

With a track record of entering almost all sectors and businesses involving massive scale and heavy investment, Ambani’s recent moves into hospitality have raised eyebrows and generated speculation about his intentions. 

The latest development involves a collaboration between Reliance and The Oberoi Hotels and Resorts, where they will jointly manage three properties across India and the UK upcoming Anant Vilas Hotel in Mumbai’s Bandra Kurla Complex, the Stoke Park in the UK, and another planned, unnamed hotel project in Gujarat. This is the first time Reliance is stepping into hotel management despite having invested in the sector long back.

Last year, Reliance bought a nearly 73% stake in Mandarin Oriental Hotel in New York for almost $100 million, a year after it bought Britain’s iconic country club and luxury golf resort, Stoke Park, for 57 million pounds. 

For more than a decade, Reliance Industrial Investments and Holdings Ltd (RIIHL), a wholly-owned subsidiary of Reliance Industries, has been making sporadic investments in hotels. It all started with the Oberoi Group in 2010 when Ambani stepped into the firewall group.

Over a decade ago, Reliance Industries’ subsidiary, Reliance Industrial Investments and Holdings Ltd (RIIHL), purchased a 14.12% stake in EIH Limited, the flagship company of the Oberoi Group. This strategic move was aimed at safeguarding EIH from potential takeover attempts by ITC Ltd, a competitor in the hotel business. 

The involvement of Mukesh Ambani’s wife, Nita Ambani, and confidante, Manoj Modi, on the EIH board further solidified the relationship between the two corporate giants. While the initial investment was primarily financial, discussions around joint hotel developments hinted at a deeper collaboration.

Reliance’s subsequent acquisitions of hotels in New York and the UK and its plans to establish new hotels in Mumbai and Gujarat have led to speculation about a potential acquisition of ITC’s stake in EIH. 

In 2019, there were rumors of Reliance aiming to increase its stake in EIH, raising the possibility of negotiations with ITC to acquire part of its stake. This strategic maneuvering could position Reliance Industries as a direct competitor to established players like ITC and Tata Group’s Indian Hotels, which operate in India’s competitive hotel industry.

The Oberoi Group’s reputation for maintaining high standards in service and luxury, along with its global recognition, aligns with Ambani’s penchant for quality and scale. Ambani’s deep pockets could provide the financial muscle required to fuel growth as the hospitality industry faces challenges due to underinvestment and growing demand. 

Despite operating margins in the industry rebounding to pre-COVID levels, high capital costs for new properties due to escalating land and construction expenses remain a concern.

Reliance’s partnership with The Oberoi Group to manage properties in Mumbai, the UK, and Gujarat is a strategic move that leverages the expertise of the latter in providing outstanding customer service. 

The Oberoi Group’s rich portfolio of historic properties and its ability to enhance them while preserving their essence make it an ideal collaborator for Reliance Industries.

Ambani’s Are Everywhere

Critics, however, raise concerns about conglomerates amassing influence and ownership across various sectors, potentially leading to monopolistic tendencies. The rapid diversification of Reliance Industries under Ambani’s leadership has fueled fears of an Ambani-centric business landscape, where the conglomerate’s reach spans various sectors, potentially affecting competition and diversity in the market.

As Reliance Industries continues its expansion, the hospitality industry could be the latest domain where Ambani leaves his mark. With ample resources and a penchant for grandeur, the conglomerate’s foray into hotel management signifies a potential shift from catering to the masses to capturing a more refined market segment. 

While the collaboration with The Oberoi Group indicates a strong start, the trajectory of Reliance’s involvement in the hotel business remains a topic of intrigue and speculation.

Reliance Industries Partners with Oberoi Group for Three Hospitality Ventures in India and UK

Furthering on Reliance Industries’ collaborative agreement with The Oberoi Hotels and Resorts, an entity under the renowned Oberoi Group – the partnership is set to collectively manage three prominent hospitality projects spanning across India and the UK. 

As mentioned before, the properties encompass the highly anticipated Anant Vilas Hotel situated within Mumbai’s vibrant Bandra Kurla Complex (BKC), the distinguished Stoke Park located in the UK, and an ambitious, yet-to-be-named hotel venture in Gujarat.

Stoke Park Limited, a subsidiary under the Reliance Industries umbrella, currently owns an array of sports and leisure amenities nestled in Stoke Poges, Buckinghamshire. 

Among its notable features are a luxurious hotel, expansive sports facilities, and a highly acclaimed golf course, heralded as one of the premier courses across Europe. 

Reliance Industries has articulated that The Oberoi Group will lend its expertise in the process of enhancing these facilities. Plans for a comprehensive overhaul of Stoke Park, encompassing both golf and various sporting amenities, are presently in the works.

Furthermore, the collaborative initiative extends to encompass an upcoming, undisclosed hotel endeavor in Gujarat, presently underway and making strides towards implementation.

In an insightful commentary on this strategic collaboration, Reliance Industries emphasized The Oberoi Group’s unparalleled reputation for delivering exceptional customer service within the hospitality industry. 

The Oberoi Group boasts a portfolio replete with historic properties and palaces, all of which have undergone meticulous enhancements, underscoring the group’s commitment to preserving their unique character and vision.

The Last Bit, While this partnership signals an exciting venture into the hospitality sector for Reliance Industries, it also raises pertinent questions regarding the expanding influence of conglomerates across various sectors. Observers have voiced concerns about the potential ramifications of such widespread ownership, as it may have implications for competition, diversity, and market dynamics.

As Reliance Industries and The Oberoi Group embark on this venture to jointly manage and enhance properties, the broader implications of such collaborations continue to be a topic of interest. While the partnership heralds new horizons in the hospitality sector, the potential consequences of conglomerate expansion warrant careful consideration from various stakeholders.