ITC Hotels bets on upper upscale and mid-scale growth over luxury

ITC Hotels expects faster growth in its upper upscale and mid-scale brands like Welcomhotel, Fortune, and Storii as luxury expansion opportunities remain limited in India

ITC Hotels, which has a target to cross 220 hotels by 2030 in India, expects its brands under the upper upscale segment and mid-scale segment to grow at a faster pace compared to its luxury brands, like ITC Hotels and Mementos.

 

“Luxury (segment) is not going to be fast-paced because the opportunities are very limited,” Anil Chadha, managing director of ITC Hotels, told the media on the sidelines of ‘The Branded Residences Summit’ in Mumbai. “Everybody wants a luxury tag, but they (hotels) don't have a product to match the luxury tag…Tier II, III cities want an ITC hotel, but there is no propensity to pay (in that market).”

 

ITC Hotels, which recently demerged from ITC, currently has Storii in the boutique premium segment, Welcomhotel in the upper upscale category, Fortune in the midscale segment, and WelcomHeritage in the heritage leisure space. 

 

“Metros like Mumbai, Delhi, Bengaluru, and Hyderabad are booming markets right now and have great opportunities and room to grow (for the luxury segment). For us at least, it (growth) is happening in the upper-upscale segment, mid-scale segment, and the experience brand Storii, where we have opened seven Storii hotels and have 12 in the pipeline.”

 

According to the company’s investor presentation, ITC Hotels has 18 operational hotels under its luxury segment, with only two hotels in the pipeline through its Mementos brand, as of June 30. In comparison, through Welcomhotel, it has 27 operating hotels and 17 under the pipeline. Apart from this, it has 57 operational Fortune-branded hotels with 24 under the pipeline. Overall, ITC Hotels has 143 operational hotels, as of June.

 

Chadha further added that the growth in the company’s Storii brand is boosted by India’s leisure tourism, road connectivity and increase in the number of airports.

 

While the company has been present in the branded residency segment, the company is open to exploring and expanding it further. 

 

“We are a pure-play hospitality company, exploring opportunities to add value in luxuries. It is important to get the right partner and invest in the right project. Many discussions are ongoing but not yet finalised,” he said. 

 

The branded residencies segment will provide hotel chains with another lever of growth and an opportunity to extend services through cuisine, sustainability, and wellness, among others, Chadha explained. 

 

“Some traction is visible in leisure spaces like hills and beaches (in branded residences). Branded residences under The Storii are planned, combining villas with hotels, offering maintenance, safety, security, and services. Metro locations also hold strong potential,” he added.