Indian Hotels Company Limited (IHCL) is planning a wider global footprint for its luxury Taj brand which completed 120 years on Saturday.
The first Taj Mahal Palace hotel opened in Mumbai in 1903. Today, the Tata-group-owned chain has a portfolio of 280 hotels, in operation and pipeline, spread across eleven countries. Further expansion is being planned in countries which are popular tourist destinations or home to strong Indian diaspora.
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IHCL Managing Director & CEO Puneet Chhatwal said the company is evaluating development opportunities for the Taj brand in West Asia, South-East Asia and gateway cities in Europe.
“We have been making significant strides in international markets. Our hotels in New York and London are our global brand ambassadors. We are expanding our presence and following the Indian diaspora wherever they are present in large numbers,” Chhatwal told businessline.
Asset light model
The company will continue to pursue an asset light model and will not infuse own funds in buying overseas properties as it did in the past. Instead, the focus will be on management contracts or operating leases.
In the past twelve months, IHCL signed deals for hotels in Bangladesh, Bhutan, Germany and Saudi Arabia. The Taj Exotica Resort and Spa opened in Dubai last March and Bombay Brasserie restaurant began operations in Singapore last December.
International properties accounted for around 22 per cent of IHCL’s enterprise revenue in FY23. Strong RevPar growth ( revenue per available room) in key markets such as Dubai, Maldives and London resulted in profit in its international business last fiscal. The US market, however, continues to struggle and Taj properties in New York and San Francisco are yet to reach pre-Covid level.
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Domestic business continues to remain strong. “The Indian hospitality sector is experiencing remarkable growth in 2023 with the sector witnessing double-digit revenue growth,” Chhatwal said. Growth has been led by big ticket events such as cricket world cup and weddings.
At a consolidated level, IHCL reported 18 per cent and 37 per cent year-on-year increase in revenue and net profit in Q2 FY24.
All its top properties reported growth in revenue and operating profits. The Taj Mahal Palace in Mumbai saw 19 per cent y-o-y increase in revenue in the second quarter.
“We remain committed to offering the quintessential Taj service with genuine warmth, and care in the years ahead,” said Ritesh Sharma, general manager, Taj Mahal Palace, Mumbai on hotel’s 120th year celebration.