Shangri-La walks out of Mumbai project

The management of Hong Kong-based Shangri-La International and Pallazzio Hotels and Leisure, a subsidiary of the BSE-listed Phoenix Mills, have decided to part ways just nine months after the Shangri-La Hotel in Mumbai became operational.

The hotel owned by Pallazzio, and run by Shangri-La, said they mutually decided to part ways but refused to give any reason for it.

"We have mutually decided to end their relationship and Shangri-La will withdraw from the management of the Shangri-La Hotel, Mumbai," Shangri-La International Hotel Management said in a statement to PTI.

The Mumbai property, which opened its doors to guests just nine months ago, will be handed over to the owning company on 6 September and will no longer be part of Shangri-La Hotels and Resorts chain, it added.

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In a notice on their website, the hotel management has said: "As of 6 September 2013, Shangri-La Hotels and Resorts will no longer manage Shangri-La Hotel, Mumbai. The hotel will be renamed and operated by the owner."

[caption id="attachment_1068751" align="alignleft" width="380"] Screengrab of Shangri-La, Mumbai's website.[/caption]

Phoenix Mills' joint managing director and group chief executive officer, Shishir Shrivastava, confirmed the development to the Economic Times.

He, however, declined to comment on why the 20-year contract was terminated within nine months. The newspaper reported that the mutual decision will mean that there will be no penalties involved andPallazzio has reportedly finalised a new operator to manage the 390-room hotel.

"The property will continue to operate as an uber-luxury hotel with several enhancements, new banquet facilities and further the signature restaurant Mekong and Libai Bar will launch as planned by mid-September,"Shrivastava toldET.

The project had been invited controversy after the construction of the hotel began before getting environmental clearance for it.

At present Shangri-La Hotels and Resorts have one property in New Delhi and two are under development - Shangri-La Hotel Bangalore (to be operational by 2014) and Palm Retreat Shangri-La, Bangalore (to be operational in 2015).