MD and CEO's Message
Streamlined growth with a future-focussed vision
"Your Company is reimagining itself by leveraging its strong brand equity tomultiply its portfolio while aligning to high- growth segments. This includes manoeuvringexcellence and reinvigorating the portfolio across all brands."
I am happy to present to you the Annual Report of The Indian Hotels Company Limited(IHCL) in a year we have done well and my first as its Managing Director and ChiefExecutive Officer. It is also the year the Tata group is celebrating its 150thanniversary an illustrious history in which we have played a significant role with a115-year presence ourselves.
The global travel and tourism industry posted a strong showing in the financial yeargrowing at 4.6% with particularly good performance in Asia. This had a positive rippleeffect on the hospitality sector in India which had been struggling with declining roomoccupancy and pricing. The fiscal saw demand growth at 5.0% continuing to outpace supplygrowth at 3.2% primarily due to the rising purchasing power of domestic travellers anincrease in commercial development and foreign tourist arrivals a growing airlineindustry and Government-led initiatives aimed at stimulating the sector. These includebranding and marketing outreach and allowing 100% FDI in the hotel and tourism sectorthrough the automatic route.
During the year we registered strong profitability even as revenues grew at a moderatepace. Our continued efforts to drive cost efficiencies and strengthen our balance sheethave already started yielding results.
Customers across the world now expect hospitality to adapt to their evolving needs andpartner them through their professional and personal journeys. At IHCL we have always setbenchmarks in service quality and our global portfolio demands that we continuouslyreinvent ourselves for the future to check in. We are driving this transformation with afive-year growth map - Aspiration 2022 - that provides a template for us to growprofitably and sustainably.
Aspiration 2022 will lead us to re-structure our operations and re-engineer processesin a larger effort to re-imagine our engagement with all stakeholders. Re-structuringentails a continuous and careful re-examination of your Company's existing portfolio tounlock value from efficiencies in scale and simplify the holding structure for greaterprofitability and a growth in EBITDA margins. IHCL will also be at the forefront of changein the hospitality industry as it re-engineers systems and processes and embracestechnology.
Your Company is re-imagining itself by leveraging its strong brand equity to multiplyits portfolio while aligning to high-growth segments. This includes manoeuvring excellenceand reinvigorating the portfolio across all brands. While the iconic Taj and Vivanta willbe retained as the dominant brands in the luxury upper upscale and upscale segmentsGinger will have a significant presence in the IHCL brandscape. It will address yourCompany's drive to be present in the fastest growing segment.
The brand will take on a fresh avatar to address the needs and aspirations of the newand younger customer segments.
Integral to your Company's strategy of reinforcing the multi-product multisegmentbrandscape is our customer.
The service ethos epitomised in what we call Tajness is the soul of IHCL. Withcompetition becoming stiffer there is a stronger case than ever to communicate the meritsof Tajness as a key differentiator. Hence we have redefined Tajness - as Trust Awarenessand Joy - the trust that our guests associates and stakeholders place in us; theawareness of what is happening around us and what we need to do as responsible members ofthe Indian hotel industry and to do something effectively we must enjoy what we do; wemust do it joyfully.
IHCL is a multi-faceted global Company. Our strategy for the future hinges ondiversifying our revenue streams and utilising our products and service brands moreeffectively which is why we are reimagining IHCL's own brand positioning. One thatemphasises it is the largest hospitality Company in the subcontinent with true Indianorigins and that allows it to go beyond the current offerings ranging from luxury palacesto budget hotels and other B2B verticals like TajSATS. Based on the philosophy of Power ofOne your Company has launched One IHCL' to create an identity that unites itsbrands and businesses. This new identity will help unlock the equity of nestled'brands such as Khazana Jiva and F&B brands among others. Moreover your Company cancreate new business drivers such as shared economy models to transcend traditionalbusinesses. This will fuel growth by attracting partners and talent for IHCL as a grouprather than as Taj alone.
We have inculcated our parent Tata group's culture of growing responsibly and believeenvironmental stewardship is a precondition for our operations.
We are pursuing excellence in facility management systems and procuring local andsustainable materials remains our priority. We support the Skill India movement thatfocusses on delivering quality training apart from leveraging our supply chain to enablelivelihood opportunities for surrounding communities. Heritage conservation and communityupkeep projects run by our hotels continue to contribute to the prosperity of thedestinations in which we operate.
Before closing I want to extend my heartfelt gratitude to all the employees of IHCLwho dedicate their best to the organisation - empowering it to conquer new horizons.
I count on your continued support as we aspire to drive profitable growth and maximisevalue for all our stakeholders in a sustainable manner.