 "Tourist hotspots have appetite for more offerings, says IHCL CEO & MD")
Indian Hotels Company (IHCL), the Tata Group’s hospitality arm and Taj Hotels’ parent company, has outlined a growth path, with a focus on tourist hotspots in the country.
Puneet Chhatwal, managing director and chief executive officer, IHCL, said the country’s tourist hotspot markets like Goa and Kashmir have an appetite for more offerings from the group, while speaking to Business Standard.
Talking about Kashmir, he said there is room for at least five more offerings from the group. The group has four properties – a Vivanta in Jammu, and Vivanta, Ginger, and Tree of Life in Srinagar- in the Valley.
On international expansion, the company will focus on growth primarily through a capital light model. These will include two offerings in Bahrain in three years and two in Saudi Arabia in the next three-four years among others.
Speaking on the group’s Kashmir offerings, he added that the group will also be upgrading the Vivanta in Srinagar to Taj, to solidify its presence in the geography.
“Additionally, we might also upgrade the Vivanta in Guwahati to Taj, strengthening our presence in the north east,” he said.
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IHCL is the largest operator in the region, he said, with 18 hospitality offerings -- 14 hotels and four amã Stays & Trails.
Speaking about Goa, where the group has 57 offerings, Chhatwal said the market has an appetite for at least 18 more in the short-term.
Talking about the group’s latest contract to manage The Claridges hotel in the national capital, he said the property will not be clubbed under any existing brands of the group.
The pact with The Claridges strengthens the group’s presence in the heart of the capital after Taj Mahal at Mansingh Road, Taj Palace and Ginger in Chanakyapuri, and Ambassador and The Connaught hotels under its SeleQtions brand.
“We are happy to have a few more offerings in the capital. It is one of the biggest capital city markets in the world, and we are happy to have more offerings,” he said.
IHCL is also prioritising the right balance between asset light and asset heavy, or as Chhatwal prefers, capital heavy and capital light growth.
“We are balancing asset heavy currently with very strong expansion on asset light. While our aspiration was to be a 50:50 portfolio, it is already in favour of asset light. The sweet spot for each company in this sector would lie in finding the right mix for their own capital structure, their positioning of brands and their home market,” he said.
The company will look at entering into revenue-sharing basis, rent agreements without minimum guarantees, which is a capital-light path for brands like Ginger and Tree of Life, and management fee contracts – a capital-light route for the other brands.
“We feel that as our portfolio has grown, our guidance of 50:50 is already corrected to 35:40 being heavy and the rest being light,” he added.
Last month, IHCL unveiled its ‘Accelerate 2030 strategy’, under which it looks to grow its consolidated revenue 2x to over Rs 15,000 crore from Rs 13,000 crore at present, while doubling its portfolio of hotels to over 700 by 2030 from 350.