I see our wellness business at Rs 1,000 crore plus in 10 years: IHCL MD & CEO Puneet Chhatwal

Recently, Indian Hotels Company Ltd (IHCL), India’s largest hospitality company by market capitalisation, with brands such as Taj, Vivanta and SeleQtions, acquired a 51% stake in Sparsh Infratech Private Ltd, owning company of the brand ‘Atmantan’, a luxury wellness centre located in Mulshi near Pune. Founded by husband-wife duo, Nikhil and Sharmilee Kapur a decade ago, Atmantan is an integrated wellness destination spread over 36 acres.

In a free-wheeling chat with Business Today, Puneet Chhatwal, Managing Director & Chief Executive Officer, IHCL, spoke about the acquisition, what makes it the right fit, IHCL’s foray into wellness, and the future of the wellness market, amongst others. Edited excerpts:

What made Atmantan the right partner for IHCL’s entry into the integrated wellness segment?

The very name itself. Atma (soul), mann (heart) and tan (body). I think this just fits in very well with our philosophy. Number two, it did not happen overnight. We’ve been in discussion for nearly six years. It started pre-Covid. We had many meetings with Nikhil (Nikhil Kapur, Founder-Director, Atmantan Wellness Centre). For us, Atmantan was a no-brainer, but what caused the debate was, can we do a wellness vertical? This is not traditional hospitality.

With one month’s cash flow (Rs 240 crore was the investment in Atmantan) we have bought something that gives us a new vertical. We don’t have expertise in wellness, so we are retaining Nikhil and his wife Sharmilee in operating positions so that they continue doing what they have been doing. And we are putting the power of IHCL behind it to see if we can become even more magical.

Now comes the refined part. The world is moving towards wellness. People are willing to pay more to look younger, lead healthier lives and for longevity.

This wellness is not like a spa. It is a way of life. And it’s about taking care of the engine that is driving everything. While across the globe, it is becoming more important, it is still in its infancy in India. We are moving from a savings economy to one where we are willing to spend. We earlier spent on weddings and education but now we are willing to spend on ourselves, on living in the moment. So, the timing is right to get into wellness.

Was this acquisition driven more by changing consumer behaviour or by IHCL’s long-term portfolio diversification strategy?

It’s diversification. We have wanted to get into wellness for a while. In a Tata group company, we don’t think of a quarter, a year or two years. It’s always the long term. And that is the reason it took us so long to actually do this. 

Would you be looking at expanding the Atmantan brand?

Absolutely. At least five in the next five years. Till 2030 we should either open five Atmantan’s or they will be under development. But definitely at least two more open will open soon. (One is coming up in Hyderabad). These are all going to be newly built. If something good comes up which we can acquire and rebrand Atmantan, we will do that.

Once we are well established here, then we’ll look outside, because the West is fascinated by integrated wellness. The challenge is that we can’t take all our therapists from India there, there are work permit issues and working with Ayurveda, yoga in, let’s say Germany or France or Spain, is not that easy.

So, I think we’ll wait for a few years before we take that leap of faith.

Will IHCL scale Atmantan through owned properties, management contracts, or partnerships? How does that fit into your asset-light model?

We may have one or two management contracts of the five. But the rest would be owned.

We’ve never been hundred percent asset light. We have a lot of hotels of course. But it all depends, you know, on the opportunity, on the accessibility to the land, and especially if governments are interested in pushing forward such a project in their state.

If a state government gives us a 99-year lease, in a state where Atmantan fits in, then we are happy to build it also. We will ideally need 20 acres of land.

We have never been shy of spending money. We went on a very aggressive expansion strategy that you cannot do only on your own, but we are also building. We opened a hotel at Cochin airport. We are building one at Goa airport. We are building in Assam. And our largest investment is Taj Bandstand, which is a Rs 2,000 crore project.

Indian Hotels is a debt-free company and it is sitting on a healthy amount of cash. And all that I have just now mentioned is all done through internal accruals. 

Are wellness travellers fundamentally different from traditional luxury hotel customers?

They’re different, but the segment we are in and those that we are targeting will be more or less similar to our upper upscale and luxury hotels.

Where do you see IHCL’s wellness business in 10 years?

As a vertical 10 years from now, I see it as Rs 1,000 crore plus, which is good. This is a high margin business. And it's a business that gives you a lot of respect since you are helping people with their health.