Indian Hotels Company (IHCL) plans to add another 20 hotels to its domestic portfolio in FY24, and another 2-3 internationally, while the Tata Group company is on track to reach a total of 300 hotels by 2025.
“In FY23, we opened 16 new hotels, and in the current fiscal we intend to open another 20 hotels in India across all our four hotel brands – Taj, Vivanta, SeleQtions and Ginger – in major locations. Our properties will come up in some interesting leisure locations, and we are opening a Taj hotel in Vikhroli, and a 371-room flagship Ginger hotel in October,” IHCL MD & CEO Puneet Chhatwal told FE in an interaction.
The Taj hotel in Vikhroli in Mumbai is being built under a management contract with Godrej Group, while the new Ginger is coming up at Santacruz . The Taj brand has reached a portfolio of 100 hotels.
“These new hotels would be opened across the blend of all four brands and all nature of destinations such as Tawang, Gangtok, Munnar and Jaisalmer. We are also opening another hotel in Tirupati. Globally, we are looking for hotels under management contracts or operating leases under the Taj brand. We are not looking for any acquisitions,” he added.
Almost 70% of these properties would be under management contract and the Ginger hotel in Mumbai will be wholly owned by the company, when others will be on operating lease. The operating lease is limited to Ginger brand.
The company intends to maintain a 50:50 portfolio mix between its owned-and-leased and under managed or fee-based businesses.
IHCL is also looking at opening about two-three hotels in Bhutan, Sri Lanka or Nepal. The company is also looking at opening hotels at global destinations such as Saudi Arabia, where it already owns a hotel.
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IHCL has a total portfolio of 263 hotels, with it recording 36 contract signings at a rate of three hotels a month and 16 openings — with a new hotel every three weeks — in FY23. IHCL has posted an Ebitda margin of 32.7% in FY23, inching closer to its target of achieving 33% by 2025. Under its ‘Ahvaan 2025’, a business strategy, the company had projected to build a portfolio of 300 hotels and clock a 33% Ebitda margin by FY26.
“We well on track to touch the 300-hotel milestone,” Chhatwal said.
The demand in FY23 was robust for the hotel segment, a rebound after the Covid-19, with increase in meetings, incentives, conferences and exhibitions, G20 summit, IPL and a considerable increase in arrivals of domestic and foreign tourists, he added. IHCL reported its highest-ever quarterly profit of Rs 328 crore in Q4, a 343% rise from Rs 74.2 crore recorded in the same period of last year. For FY23, it reported a net profit of Rs 1,003 crore, against a net loss of Rs 248 crore in FY22.