MUMBAI: The Indian Hotels Company, the Tata group holding company that owns and operates the Taj brand of luxury hotels along with seven other brands, is on an aggressive overseas expansion with about 10 per cent of the planned 350 new properties to be added by 2030.
Since FY18, the company has been on a strong wicket, more than doubling the number of properties to 350 of which 238 are operational on one hand and nearly doubling its revenue on the other from Rs 4,000 crore to Rs 7,000 crore in FY24. What’s more important is that the company has turned debt-free and is sitting on a cash pile of Rs 2,000 crore as of FY24 as against a debt pile of Rs 3,000 crore in FY17. Similarly, the company closed FY24 with a net income of Rs 1,259 crore as against a paltry Rs 63 crore in FY17.
“The group’s broader plan is to take the overall properties to 700 by 2030 and of which more than 500 will be operational, offering close to 70,000 keys by 2030, up from 238 offering a little over 25,000 keys now. The top-line should climb to Rs 15,000 crore by then. Of the planned new additions, at least 10 percent of the new properties will be overseas,” Puneet Chhatwal, the managing director and chief executive, who was roped in by the Tatas in November 2017 to turn around the company, has said.
However, he did not offer a revenue share projection or the current share from overseas operations. Similarly, he did not offer a possible number of rooms as well which these 35-40 properties will be adding.
“Our foreign expansion will only be with the Taj brand and not any other,” Chhatwal said, adding “in London we have two operational properties. We are keen to add one more. In fact, we can have two more properties in the British capital.
“Similarly, for Europe, we are opening a hotel soon in Frankfurt over the next 10 months and are identifying locations in Berlin, Brussels, Paris and Switzerland, too. For Asia, we are already present in Dubai with three operational properties and will be adding one or two; there are two underdevelopment in Saudi Arabia, and one in Bahrain. Also, we will be adding more in Singapore, Thailand, Sri Lanka shortly where we already operate three and more in Bhutan where we already have four and adding a property more to the two operational in Dhaka,” he said.
The growth strategy will be both organic as well inorganic, Chhatwal said, “we are always on the lookout for a good property for accelerated growth.”
The company that owns the Taj Mahal Palace Hotel in the megapolis, which marked 16th anniversary of the deadly terror attack on November 26, 2008 in which close to 200 people, including six of its own staff, lost their lives, is one of the most iconic landmarks in the city, will invest around Rs 5,000 crore in capex to achieve these objectives through the reminder of the decade, Chhatwal, said.
Between fiscals 2018 and 2024, the number of properties the brand owned had grown from 155 to 350 of which 238 are operational offering over 25,200 keys and 118 are under-development, which on competition take the number of keys to over 42,500. So far this fiscal, it has commissioned 15 properties and 10 more will come up by March, offering around 2,500 rooms.
Chhatwal said the over the next fortnight a 250-key Taj will be operational in the Cochin airport while two more will be ready before the close of December.
When asked about the number of rooms and capex spends, he told TNIE, “typically we will be investing 5-6 per cent of our top line in capex which over the next five years should add up to Rs 5,000 crore. On the number of rooms, we’d be adding around 30,000, taking the total 70,000-odd keys.”
On the capex plans, which involve an asset heavy-model for the Taj brand, he said till 2018 they had owned close to 50 per cent of all properties but since then we have moved into a mix model and now it’s around 30:70 which means around 30 per cent of the properties are owned by the company and the rest on lease or on rentals.
Apart from the Taj, the ICHL owns and runs seven brands such as the upscale lifestyle offering Vivanta, the low cost business class offering Ginger, Seleqtions, which is a collections brand, the boutique leisure label Tree of Life, Taj Safaris focused on adventure and wildlife, the homestays offering Ama, the airport services Taj Stats and its food delivery arm Qmin.