Indian Hotels to set up 43 projects, add 12,000 rooms over next 4 years

The Indian Hotels Company Ltd (IHCL), which runs the Taj Hotels, Resorts and Palaces chain, will set up 43 projects across the country in the next 4 years.

This would mean the chain would add about 10,000-12,000 hotel rooms.

Speaking to DNA, Raymond N Bickson, managing director and CEO, there is a huge demand-supply gap that needs to be bridged in the domestic market.

“I want to focus on enhancing our market share in India instead of letting others (foreign hotel chains) steal our thunder,” Bickson said.

IHCL believes there is significant headroom despite ubiquitous talk of oversupply.

Citing reports, Bickson said there is an overall requirement of 500,000 guest rooms in India, while the current inventory is just a fifth of that at around 110,000.

While a host of international players have been announcing their India plans, Bickson said a lot of it is just talk.

“HVS, the global hospitality consultant, conducted a survey which said IHCL’s share in the development pipeline is about 40%. There is no one close to the kind of projects we are doing in the country. Last year, we launched hotels across our brands at regular intervals and we will see the momentum continuing in the coming years as well,” Bickson said.

IHCL currently operates with hotels under four brands, Taj (luxury), Vivanta (upper upscale), Gateway (upscale / mid-market) and Ginger (economy).

The development pipeline being spoken of earlier will span across all the categories wherein properties will be rolled out every 3 to 4 weeks in the coming years.

On the business performance side, Bickson is of the view that the market is quite robust and business from source markets globally is picking momentum.

“Hotels across the country are in the peak season. Business is looking very good ompared with last year. Occupancies have already reached 2007-08 levels, and room rates are showing improvement too, but they remain far below what we saw in 2008, which was an exceptional for the Indian hospitality industry,” he said.

IHCL recently approved allotment of shares and warrants to promoter group company Tata Sons Ltd.

As a result, Tata Sons’ stake in IHCL has now increased by 7.27% to 22.54%.

Following this, the overall promoter group holding is up from 30.28% to 37.55%. Through this exercise, IHCL raised approximately Rs850 crore which will be used largely to retire debt.

With 66 hotels in 42 locations across India and 16 hotels overseas including the Maldives, Malaysia, Australia,  IHCL currently owns and manages approximately 12,000 hotel rooms.