‘We can’t have brands in portfolio that aren’t perceived as premium’ | Mint
Indian Hotels CEO Puneet Chhatwal has stated that the worst is behind for India's hotel industry, and FY24 was the beginning of an upcycle after almost two years of devastation. Despite signing 36 properties over the last 12 months, IHCL is eager to add more hotels to its portfolio
Click
Use
to move to a smaller summary and to move to a larger one
Puneet Chhatwal, MD and CEO of Indian Hotels Co. Ltd., discusses the current state of the hotel industry in India and the company's growth plans.
- FY24 marks the beginning of an upcycle for India's hotel industry after two years of devastation.
- Q3 profits surpassed previous best full year's profit, indicating strong performance.
- The industry is better equipped to navigate through any future black swan events like COVID-19.
- IHCL is focused on adding more hotels to its portfolio, despite already signing 36 properties in the last 12 months.
- The company follows the philosophy of "stragility," executing strategies with agility.
- The goal is to play an attacking game and prioritize speed in decision-making.
- Ahvaan 2025 is a three-year guidance plan that includes financial performance targets, such as a 33% margin by 2025.
Growth and Strategy of Taj Group
- On track to achieve an EBITDA margin of 33% and a balanced portfolio of owned, leased, and managed hotels.
- Currently in 125 locations with a pipeline of 9,000 rooms.
- Leading in market cap, enterprise revenue, number of hotels, and destinations in India.
- Focusing on maintaining a premium perception for all brands in the portfolio.
- Signed 36 new hotels in the last financial year, with 16 already opened.
- Emphasizing value creation for stakeholders and protecting the iconic brand of Taj.
- Facing industry-wide staff shortage due to poor treatment of employees during the pandemic.
- Treating employees well and aiming to skill 100,000 people in the hospitality industry by 2030.
- Confident that talent scarcity will pass and skills can be developed within six months to one year.
Factors Influencing Room Rates and Business Initiatives
- Room rate increase varies depending on location, with higher increases seen in Goa and Rajasthan compared to Delhi or Mumbai.
- The company has reported a 27% increase in RevPAR (Revenue per Available Room) for the nine months.
- Despite higher rates, customers are willing to pay higher prices for quality and service, even in international properties owned by the company.
- The company believes that maintaining competitive rates is crucial for the growth of the hospitality sector in India.
- The supply and demand mismatch has contributed to the increase in room rates, with supply outpacing demand in the past, but now demand outpacing supply.
- New business initiatives like Qmin and Ama are profitable and expected to grow in the future.
- Qmin started as a home delivery service but is evolving into a quick service restaurant and expanding to multiple locations.
Positive Outlook and Growth Strategies for India's Hotel Industry
- FY24 marks the beginning of an upcycle for India's hotel industry after two years of devastation.
- Q3 profits surpassed previous best full year's profit, indicating strong performance.
- IHCL is focused on adding more hotels to its portfolio, with 36 properties signed in the last 12 months.
- The company follows the philosophy of "stragility," executing strategies with agility and prioritizing speed in decision-making.
- Ahvaan 2025 is a three-year guidance plan that includes financial performance targets, such as a 33% margin by 2025.
- The company is on track to achieve an EBITDA margin of 33% and a balanced portfolio of owned, leased, and managed hotels.