MBD Group partners with Steigenberger Hotels for budget hotel brand

MBD Radisson Blu Noida, India

India-based hospitality group MBD is gearing up to enter the budget hotels sector. Starting with its first hotel signed in Nasik, the bed-and-breakfast brand will launch MBD Express. 

Sonica Malhotra Kandhari, joint MD of MBD Group, told The Hindu Business Line that the brand's launch won't take place any time soon. “It’s a greenfield project. So it will take at least three years to come up.”

The group has already set the price for guestrooms at ₹2,000. “We want to disrupt the space by going lean. Right now, what is available is not accessible to the mass traveller as their rates are upwards of ₹3,000,” Malhotra said. 

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According to Malhotra, listing guestrooms at this price is not an easy task, especially in third and fourth tier cities that require an organized hotel chain. MBD plans to tackle these cities first. “We have been at the drawing board looking at how to minimize our investments and yet make money.”

For this reason, the group is eyeing management and franchise models for MBD Express. “We are looking at a bottom-up approach rather than top-down, for MBD Express,” Malhotra said. 

Through this approach, MBD will work with German hotel brand Steigenberger Hotels and Resorts in a joint venture to manage and franchise its upcoming hotels under the MBD Steigenberger and MBD InterCity Hotel brands. MBD owns a 51-percent stake in the JV. 

Together, the groups will launch their first MBD Steigenberger hotel, MBD Zephyr, in Bengaluru’s Whitefield area as part of a 2 million square-foot mixed-use development owned by MBD. The new budget hotel will be next to an existing luxury hotel and service residences on the property. 

The JV also added another two MBD Steigenberger hotels and two MBD Intercitys to the pipeline while MBD expands its “Made In India” food and beverage brand across Indian borders. The first one is lined up for London. “By the coming quarter, we should finalize a space and will then take 4-5 months to launch the restaurant,” Malhotra said. 

MBD Group launched 60 years ago, but its presence in the hotel industry began to grow more than 14 years ago. The hospitality and education group has luxury properties in Noida and Ludhiana, which operate under the MBD Radisson Blu brand. 

In October 2017, the group’s owners dodged jail time after a Jalandhar court discharged them from a six-year-old case. Top executives, including chairperson Satish Bala Malhotra, Monica Malhotra Kandhari, MD, Sonica Malhotra Kandhari and Balwart Sharma, former GM and ED, argued the claims of forgery, fraud and conspiracy made against them in November 2011 were false and alleged as part of Gurcharan Singh Syal’s land grabbing attempt. 

Syal was the group’s CA and director at the JV-managed MBD Krishna Resort. The Malhotras followed up the discharge with a complaint against Syal.