In an interaction with Benn Kochuveedan of TNIE, Indian Hotels Company (IHCL) chief executive Puneet Chhatwal, tells it will open 60 new hotels in FY27, adding nearly 6,000 keys under various brands, including homestays. During FY26, it added three new brands, taking the total to 14 and signed a record 250 hotels, expanding the portfolio to 630 hotels, with an industry-leading pipeline of 255 hotels. Edited excerpts:
What’s your outlook for the current fiscal as the industry is hit by the Gulf war?
Under our strategy for 2030 outlined eight years ago, we’ve been doing very well. There is growth on all fronts. There is growth of talent, which means growth of our people. There is growth in our revenue and profit, and moreover there is growth in our margins. And of course, there is growth in the way we cover the market. We cover India across 250 plus locations.
We’ve been consistently delivering on overall growth front. We’ve guided that our all new businesses will have a CAGR of 25% and the combined Ebita margin of 35% plus. Between FY23 and FY26 we’ve delivered a double-digit CAGR across all metrics - revenue grew 19%, operating income rose 21% and net income expanded 28%. The Taj was almost 100% of our business around 15 years ago. But there are other verticals which have evolved and are getting into double digits in topline share now. So the guidance set we had given eight years ago for 2030 of doubling our enterprise level revenue is on track.
From our first offering - the iconic hotel Taj Mahal Palace in 1903- and for the next 70 years IHCL was just one hotel company, today we’ve a portfolio of 630 hotels and will have 700 by 2030.
Your focus has been on the margin expansion front..
Yes, while we’ve been maintaining around 35% operating margin for some years now, our guidance for return on capital employed is 20%. And we feel very proud that despite all hindrances, despite the West Asia wars and despite many operational difficulties, we made it good. If you actually look at the past 12 months, everything went wrong that could have gone wrong every month. But still, the sector demonstrated resilience, and we being the largest, benefitted the most. And I don't see any change to this optimism because I think the golden era of tourism and hospitality has started in the country. This is one of the most fascinating sectors given it has the highest job multiplier effect. Spiritual tourism is on the rise and so are medical, experiential and yoga tourism.
How confident are you to tide over the crisis which is more frequent than in the past?
I remain very confident because I don't expect any slowdown happening. There will be bumps, there will be headwinds that will come in a 365-day period. But the bounce back will be always faster, whether it's here or outside, the sector has demonstrated very strongly post-Covid. That is the first answer.
Secondly, should there be some drop in the existing business, we are adding on an organic basis alone--and am not counting here inorganic growth - anywhere between 55 and 60 hotels this year, last year we opened 30 and in the year also a similar number was added and all these add up to a good 630 properties now.
And how many keys you will be adding across how many properties?
We are looking at anything around 6,000 keys under various brands, including our homestays, across 60 properties. Our most exciting opening is round the corner is the Frankfurt hotel very soon, which due to some unavoidable reasons is delayed by six weeks Germany.
