Leela Palaces, Hotels and Resorts, owned by Hotel Leelaventure Ltd., has discontinued its marketing and branding alliance with Kempinski, putting to end its 25 year-old association with the German hotel group.

Both the partners mutually agreed to close their alliance, The Leela said on Monday. The alliance ended on October 1, 2013. 

“Following a progressive phase-out, which began in 2012, the [parting] agreement will allow The Leela to further consolidate its network, while facilitating Kempinski’s direct entry into the domestic [Indian] market,” The Leela said in a statement. This development will not affect the Leela group’s occupancy rate as the company already has forged  marketing alliances with U.S.-based Preferred Hotels Group and Geneva-based Global Hotel Alliance, a senior company official said.

Since December 2011, the Leela Group has changed its booking code from KI to LR, thus establishing its brand name in the international market, the official added.

“The strong co-operation enjoyed by the two luxury brands over more than two decades has immensely benefited both

“The Leela and Kempinski, and helped significantly increase brand awareness globally and in the domestic market,” Capt C.P. Krishnan Nair, Chairman Emeritus and founder of The Leela group, said.

The group is in the process of significantly expanding its portfolio in the next four years, it said. In addition to The Leela Palace Chennai, which opened in February 2013, new properties are coming up in Jaipur, Bangalore, Agra, Noida, and Lake Ashtamudi in Kerala.

In the process, Hotel Leelaventure has built up a debt of around Rs. 4,000 crore, and the company is in the process of selling non-core assets and raising funds to reduce the debt burden. Shares of Hotel Leelaventure, on Monday, ended with a gain of 2.33 at Rs. 14.95 on the BSE.

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