Chhatwal on Indian Hotels’ growth, brands, future
 
Chhatwal on Indian Hotels’ growth, brands, future
24 SEPTEMBER 2018 8:44 AM

In the 12 months since Puneet Chhatwal took over the CEO role at Indian Hotels Company Ltd., the iconic hotel company has expanded not only Taj but its other brands, put in place a new business plan, overseen the third consecutive quarter of positive earnings results and added a new collection called SeleQtions.

MUMBAI, India—It has been one year since Puneet Chhatwal was announced as Indian Hotels Company Ltd.’s new president and CEO, arriving from his previous role as CEO of Germany’s Steigenberger Hotels AG, now renamed Deutsche Hospitality.

Puneet Chhatwal,
Indian Hotels Company

In those 12 months, Chhatwal has been busy. Highlights include a February announcement of a five-year business strategy targeted at improving earnings before interest, tax, depreciation and amortization margins by 800 basis points; then in April, the Taj brand signed its first asset in Saudi Arabia, a 340-room hotel in Makkah.

In August, it signed with Hayre Group to open its first Vivanta-branded hotel in the United Kingdom, at London’s Heathrow Airport, as well as two Taj-branded hotels for a total of three in Dubai. With Signature Zinc Holdings Ltd. it will open the 200-room Taj Jumeirah Lake Towers, and with A.A. Al Moosa/Arenco Group it will open the 325-room Taj Exotica Resort & Spa.

Taj already is a brand with a long history. The Taj Mahal Palace, Mumbai, its debut opening, is 115 years old this 16 December, the date it was founded by Jamsetji Tata, who gave his name to the conglomerate Tata Group, which owns IHCL.

In early 2017, before Chhatwal’s arrival, all Taj assets, previously arranged in silos, were grouped together under one umbrella, Taj Hotels Palaces Resorts Safaris.

ICHL’s other brands, Vivanta and The Gateway, are seeing expansion, while Roots Corporation Ltd., a subsidiary of ICHL, operates Ginger Hotels, which Chhatwal says operates in the “lean luxury” segment.

Hotel News Now interviewed Chhatwal to ask him about the realignment of the company, other changes and future trading and expectations for the iconic Taj brand and the parent company’s other offerings:

Why and how is IHCL refreshing its offerings?
Puneet Chhatwal: “The refreshed ‘brandscape’ will enable IHCL to expand its portfolio across different customer segments with various brands to address different price points. The brand portfolio will comprise the iconic Taj Hotels, which will continue to operate in the luxury segment in key gateway cities. Vivanta will be the growth driver for tier-two and (tier)-three cities and operate as upscale hotels for the sophisticated traveler, (and) Ginger will have a significant presence in the IHCL portfolio and will address the company’s requirement to be present in the fastest growing midscale and economy segment.

“We have launched a new brand called SeleQtions, a ‘named’ collection of hotels that are completely unique; each hotel will have a distinctive name. This will address the requirements and aspirations of our new, younger customer. This new ‘brandscape’ will allow IHCL to offer something for everyone, whilst protecting their iconic Taj brand.”

What is the general feeling about ICHL and the Indian hotel market at the moment?
Chhatwal: “I am immensely optimistic. IHCL delivered 101(Indian rupees) ($18.7 million) crore profit, a 4% growth in consolidated revenue and an increase in operating EBITDA of 11% for full-year 2017 to 2018. The company delivered a profit in the first quarter 2018 to 2019, marking the third consecutive quarter of achieving positive results for IHCL.

“We have already signed up 12 new hotels across all our brands in India and key international destinations, including two greenfield projects in Makkah, Saudi Arabia, and a Vivanta at Heathrow Airport. By 2022, we are aiming to increase room inventory to over 25,000 rooms in all categories and enhance our geographical footprint in India and key growth markets abroad.

“I do believe this is such an exciting time for India as it is set to be a $6-trillion economy by 2028, the third-largest on the globe. In addition to international visitors, the domestic traveler is also becoming even more important to us.”

What have been the biggest pluses and challenges of your new role since joining?
Chhatwal: “I am very encouraged by the incredible and committed people in the company. We have an amazing, almost unbeatable brand value in India and a legacy of over 114 years.

“There is a huge opportunity in unlocking the value and full potential of IHCL. We will have a continued focus in executing ‘Aspiration 2022,’ our five-year business strategy, where we are looking at increasing our EBITDA margins by 8%.”

Taj is doing a big push with its brands Vivanta and Ginger. Is this a quest for a more midscale brand to complement Taj?
Chhatwal: “The new ‘brandscape’ ensures that all demographics’ needs are being catered to, from the high-end affluent leisure and business traveler (Taj Hotels) to the aspirational upscale traveler (Vivanta) and the lean luxury traveler (Ginger).

“Vivanta will be the growth driver for tier-two and (tier)-three cities and operate as upscale hotels for the sophisticated traveler. Ginger will have a significant presence in the IHCL portfolio and will address the company’s requirement to be present in the fastest growing ‘lean luxury’ segment.”

What are the development plans for Ginger and Vivanta?
Chhatwal: “Vivanta has 19 hotels currently. Post the completion of migration, it will have 23 hotels. We have three hotels under development for this brand, two in India and one at Heathrow Airport, London.

“Ginger is a domestic brand. It has 45 hotels and another 10 hotels under development.”

Is the world ready or waiting, or perhaps already enjoying, Indian-style hospitality?
Chhatwal: “Yes. The reason why guests choose Taj Hotels in India and beyond is due to the ability to weave Indian heritage and culture into the services and offerings. We have summed this up as ‘Tajness.’ It is this unique feeling and experience, which sets the group apart from its competitors.”

Where will Taj/IHCL be in the next five years?
Chhatwal: “Under the (five-year business strategy) plan, the company will work toward greater profitability and market leadership in each of the IHCL relative market segments.

“Key tenets of the plan include unlocking value from efficiencies in scale and simplifying the holding structure for greater profitability. The plan will include aligning the company’s brands to dominate high-growth segments, implementing an aggressive development pipeline and restructuring assets for balance sheet optimization.”

2 Comments

  • kicero shah September 24, 2018 2:27 PM Reply

    These plans are very modest, not challenging enough for ambitious. I would, therefore, expect a greater push for expansion. Only five new hotels in luxury pipeline, it could be at least twenty five.
    May be his Board is asleep at the wheel.

  • Imanat Singh Randhawa September 25, 2018 2:03 PM Reply

    1. ICHL’s other brands, Vivanta and The Gateway, are seeing expansion, while Roots Corporation Ltd., a subsidiary of ICHL, operates Ginger Hotels, which Chhatwal says operates in the “lean luxury” segment.
    2.What is the general feeling about ICHL and the Indian hotel market at the moment?
    Chhatwal.

    Dear Team,
    Request you to correct ICHL to IHCL at 3 places. :)
    Regards,
    Imanat Singh Randhawa

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