Tata Group's Indian Hotels Company has a new strategy for success

The Tata group owned Indian Hotels Company Limited (IHCL) will have a huge thrust on being only in the high EBITDA margin businesses. This will be a part of an initiative called “Ahvaan – 2025.”

According to Puneet Chhatwal, MD and CEO, IHCL, the target is to get to a level of 33 per cent at the consolidated level with new properties such as the upcoming Ginger in Mumbai’s Santacruz expected to hit 55 per cent.

“The pandemic saw our revenues dropping but we also figured out ways to cut back on costs. In many ways, it is a change in business model,” he told the media in Mumbai. The roadmap for Ahvaan – 2025 outlines IHCL expanding its portfolio to over 300 hotels – there will be 100 Taj properties, 75 Vivanta and Seleqtions, 125 Ginger. The focus is also to become a zero-debt company.

Outlining a few trends, Chhatwal said business trips are now longer leading to higher occupancy levels.

“Our priority is to be a premium player in every segment we operate in. We see a huge opportunity in increasing our EBITDA levels and over time, 30 per cent of the revenue will come form the new businesses,” he explained.

IDBI Capital, in a report put out on 24 May, said, “We believe the hotel industry has rebounded post the hiccup of the third Covid-19 wave and the growth across the segments is encouraging. IHCL, being the industry leader, is in a sweet spot to benefit from improving industry trends.” Just in the current year, the company is looking at 18-20 openings.

IHCL is known for its marquee properties such as the Taj Mahal in Mumbai and Taj Mansingh in Delhi. “Our international business is also doing well with properties in prime locations. Through a management contract or revenue share, we would like to have one iconic asset in Europe,” said Chhatwal, while making it clear that acquisitions were not priority.