THE INDIAN HOTELS COMPANY LIMITED
Another busy year for all your Company's hotels saw turnover rise by 43%
and profit after tax by 71% over the previous year's levels. With these
excellent results, the Board has recommended a dividend of Rs. 7.50 per
share (compared to Rs. 5.50 in the previous year). The dividend will be
payable pro rata on nearly 5.2 million Global Depository Shares issued in
May, 1995, and will be 52% higher than the previous year.
Taj Luxury Hotels
Taj Luxury Hotels recorded improved yields and occupancies. More "De Luxe"
and "Taj Club" floors, created as a part of the renovation, refurbishment
and modernisation programme, were available during the year. Designed for
the business traveller, who needs to live in and work from the hotel room,
these floors and their new facilities have been well received. Addressing
the needs of the same market, new large business centres with state-of-art
office, communication and meeting facilities were commissioned in our
Luxury Hotels. Taj West End, Bangalore, added a new expanded lobby along
with public areas.
The renovation programme of our Luxury Hotels will continue over the next
two years. We have planned the programme in each hotel so that the
inconvenience to our guests is minimal and sufficient rooms are available
during periods of high demand.
Taj Business Hotels
Taj Residency, Hyderabad, became a part of the Company's operations during
the year under review. The hotel has been fully remodelled, refurbished and
upgraded from a Gatway Hotel. Taj Business Hotels serve a growing market,
and there are now seven Taj Residency's in the Taj Group.
Taj Leisure Hotels
A recovery in international leisure travel during the year and a buoyant
domestic market was evident in an improved performance by the TaJ Group's
leisure hotels and resorts.
The performance of Taj Group's hotels and resorts operated by your Company
has been equally heartening.
Your Company has emerged as the market leader in airline catering in India.
A new air catering unit in Mumbai located near the International Passenger
Terminal has been commissioned during 1996-97. It is one of the most
sophisticated units in Asia and has a capacity of 10,000 meals per day.
The unit in Delhi is undergoing major renovation. With both domestic and
international airlines increasing their flights, we expect continued growth
in business. We are constructing an air catering unit in Calcutta.
associated Companies are building air catering units, which will be
operated by the Company, in Goa and Madras.
Our new hotels projects reflect our policy to maintain the Company's
leadership in the markets we serve:
-- Two new luxury hotels in Mumbai and one in Madras are under way.
-- We have acquired an 11 acre site in Calcutta where we will build a
hotel of appropriate international standards.
-- Taj Residency, Calicut, will open in 1996-97.
-- Work on the Leisure Hotels at Jaisalmer and Jodhpur is progressing
The new projects of our associated companies and joint ventures are
progressing well. We have decided to fully implement the Taj Group's plans
in the budget and economy sectors through Gateway Hotels and Gateway
Resorts Limited (GHGR), which has been promoted by your Company. GHGR's
hotels and resorts will be marketed in close association with the Taj
The Pursuit of Excellence
I would like to congratulate Mr. R.N. Tata, Tata Group Chairman and a
member of our Boar, for his initiative in establishing the J.R.D. Quality
Value Award. This Award, instituted in memory of Mr. J R D Tata, is an
appropriate recognition of the man who epitomised excellence in thoughts,
words and deeds. Encouraged by this award, your Company had embarked on a
mission to improve the quality of its products and services in every area
of the Company's operations. This process, which is initiated, will be to
the benefit of all the stake holders in our business be it the customer,
shareholder, the employee or the community at large. As I write this
review, I am informed that, in this year's assessment for the "JRD QV"
Award, one of the Taj Group's hotels viz., the Taj Residency in Bangalore,
secured the highest points among all the competing units of various
companies. I am sure shareholders will be proud of this achievement.
The most important factor to maintain excellence in service - in our
existing and new hotels - remains the recruitment, training and development
of people. Shareholders enthusiastically supported our decision to
establish the Indian Institute of Hotel Management, Aurangabad, as a hotel
school of the highest international standards. We believe that we are
steadily moving towards this objective. The first batch of students will
graduate in August, 1996 after completing a 3-year curriculum created in
consultation with some of the world's leading hotel schools. Most of them
will join the Taj Group. Based on the overwhelming response for admission,
we have now decided to increase the number of seats to 90. The Institute
has drawn its faculty from India and overseas, and provides quality
training facilities, innovative teaching methods, modern equipment and a
high degree of computerisation. Most important, students receive practical
training at the adjoining Taj Residency. We will now be adding to the
Institute's facilities. These include a first class library, a computer
training laboratory and a state of the-art auditorium. The Company also
proposes to fund dormitory facilities for students and to provide faculty
As part of our ongoing effort to protect and conserve the environment, the
Environmental Initiative Group, which I referred to last year, has
developed a co-ordinated environmental programme throughout the Company.
The objective of this programme is to establish your Company as a model
for the development of sustainable business practices and as a leader in
the promotion of eco-tourism. This group of highly qualified
environmentalists guide, advise and assist environmental task forces
set up in each hotel of the Taj Group. Priority areas being addressed
include the treatment of waste water and re-cycling of treated water for
gardening, cooling towers etc.; the reduction of energy consumption;
the reduction, the re-use and the re-cycling of waste; and the use of bio-
degradable eco-friendly products in all our hotels.
We recognise that the development of hotels in ecologically sensitive areas
requires to be sustainable, and we have commissioned a pilot eco-tourism
project by experts in the field. The project which is in progress will help
us to determine our approach to building hotels near the coastline and in
placed of historical interest as well as to the development of jungle
Your Company has always been committed to fulfilling its social
responsibilities. In order to adopt a more focussed approach to community
initiatives, we have established a cell to co-ordinate these activities
across the Taj Group. In addition, the Company works in co-ordination with
other companies on common social and community projects in various parts of
In order to enhance levels of safety for guests, employees and the
company's property, detailed assessments by Tata Risk Management Services
were carried out in selected hotels across the Group. Their
recommendations will, in the long term, favourably impact the insurance
premiums paid by the Company.
We hope that the welcome absence of events and circumstances, which has
adversely affected travel in past years, will continue. Shareholders will,
I am sure, continue to support of hotels in every sector, and travel and
tourism now the world's largest industry can't grow very much further in
our country without adequate supply. We are committed as ever to providing
this essential infrastructure. Our thanks to all our staff who have made
the present possible and will, no doubt, take your Company to even greater
Place : Mumbai
Date : 28th July, 1996.