Indian Hotels eyes US operations rebound in 15 months
Indian Hotels Co Ltd has set up a task force, as it will ramp up The Pierre, New York.
Indian Hotels Co Ltd (IHCL) has cobbled together a task force of senior officials with a singular mandate: turn the hotels business in the US - comprising The Pierre in New York, the Taj Boston in Massachussetts and the Taj Campton Place in San Francisco — cash positive within the next 14-15 months.
Anil P Goel, executive director - finance, said, that is priority No. 1 for the Tata Group company now.
“We are doing everything required. Turnaround in 14-15 months from now is the target,” he said.
The company’s US portfolio comprises 672 guestrooms and suites (The Pierre has 289, Taj Boston 273 and Taj Campton Place 110). The New York hotel is on long lease while the other two are owned.
“It is a bit challenging … the average daily rates for our US properties are below expectations. There is an opportunity to ratchet up the positioning of The Pierre to where high-end hotels currently are … by bridging the rate gap … through on-the-ground efforts. Once that is achieved, operating profit will automatically improve,” Goel said.
An umbrella company planned to house all international hotels operations is also progressing well.
“We are running it past the Reserve Bank as it needs certain approvals. Existing companies will have to be wound up and new ones formed. We will get into implementation mode as soon as the approvals are in place. Rollout should take about 6-7 months and we should have it all in place by the middle of the next fiscal,” Goel said.
What that essentially means is shifting international operations into a company that’s a mirror image of IHCL. This exercise gives the group more execution latitude, including in fund raising.
“Right now growth is limited because of the way the assets are performing. This exercise will help us fix the problem,” said Raymond N Bickson, managing director.
The company swung to profit in the second quarter ended September 30, netting Rs8.12 crore against a loss of Rs6.30 crore in the same period last year. Total income stood at Rs357.56 crore against Rs328.50 crore.