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Indian Hotels Company, India’s largest hotel company, run by the Tatas, will open 14 new properties in India and abroad this year. This will be twice the inventory the Mumbai-based company is set to open compared to last year, when it added seven new properties.
The new properties this year include Taj Airport Hotel,Bengaluru, Vivanta by Taj, Amritsar and Gateway Hotel, Corbett.
The list also includes nearly 400 rooms under the budget brand Ginger. The 296-room Taj Downtown, Dubai was opened in April this year.
This will push up IHCL’s inventory to nearly 17,500 rooms with 145 properties, as compared to 15,751 rooms with 131 hotels at present, an increase of just over 10 per cent. ITC will remain the second largest hotel operator in India.
“There are two Taj hotels at Santacruz, Mumbai and the other at BIAL, Bangalore which will open this year. Within the Vivanta by Taj portfolio, two new hotels are expected to open by the end of the year which include Guwahati and Amritsar. Two Gateway hotels at Hinjewadi, Pune and the other a resort at Corbett are likely to open this year as well. Additionally, The Gateway Hotel, Nashik will open its additional block of 78 keys later this year’’, said the company in its 114th annual report.
The company is aggressively trying to fend off a resilient competition including Hyatt, Marriott, Starwood and Intercontinental Hotels, who are making strong in roads into India.
Apart from this IHCL is keen to bring down its overall debt in order to reduce its interest burden.
The company’s total stand-alone debt (excluding funds raised through the Compulsory Convertible Debentures issue) as on March 31, 2015 is Rs 2,209.08 crore, of which debt amounting to Rs 790 crores is secured by mortgage of the company’s movable and immovable properties, as per the report. Its consolidated gross debt stands at Rs 4075 crore as of last year.
US and European hotel brands have introduced a bouquet of brands serving a variety of segments – from budget to luxury – to tap demand at every level. This has put pressure on every Indian hotel operator including IHCL.
“During the year, the company continued to face a challenging environment, not just in the domestic market, but also across key international markets wherein the company owns / operates hotels”, IHCL noted.
Like its peers IHCL too has shifted to management model (asset light) in order to reduce its cash outflow. Last year the company incurred Rs 137.65 crore towards capital expenditure, most part of which was spent on the covering Vivanta by Taj hotels at Dwarka, Guwahati and new IT initiatives.
For three consecutive years ended March 31, 2015 IHCL has been posting losses, a first in the history of the company. As per the company management, in a discussion earlier, a recovery could only happen after two years.
The company’s hotels in the US have reported relatively flat turnover and EBITDA compared to the previous year. It has three hotels in the US – The Pierre, Taj Boston and Taj Campton Place, San Francisco.
