Taj Hotels’ parent company Indian Hotels Company (IHCL) is expecting the January to March quarter to record double digit growth.
“With large-scale events like Mahakumbh, concerts like Coldplay and the extended wedding season in the fourth quarter, we remain confident of delivering all the metrics,” said Puneet Chhatwal, managing director and CEO of IHCL on Friday.
There were concerns last year after the G20 Summit and the Cricket world cup ended: What would keep hotels occupied after those mega events had concluded?
IHCL’s occupancy during the October-December quarter in 2024 remained near 80%. “If we operate around this occupancy, the room rates will only keep increasing,” Chhatwal said during an earnings call. “A few quarters ago, there were questions about what would drive occupancy this year as opposed to G20 and world cup last year. You see that there is no change in occupancy and the rates have gone up.”
Chhatwal added that this is not expected to change soon as more business delegations are coming to India. “The demand on both business and leisure remains quite robust, which will help the standalone occupancy. And that is what is creating the higher rate.”
Betting on India’s Growth Story
According to Chhatwal, other factors that could help results include:
A strong wedding season, driven by a favorable calendar: “Next year will be one of those first years after 3, 4 years, where the number of wedding dates actually increased by 5 or 6 more days in the next financial year.
India’s economic growth: “If India keeps moving in the direction that it is currently moving in, the hospitality sector is only going to get better. In principle, the fundamentals have never been as strong as they are now.”
The return of foreign tourist arrivals: Chhatwal said that ideally, the foreign tourist numbers should have been at around 120% of the pre-Covid levels. As things stand, this is at around 90%. “You can see the foreign tourists are beginning to travel in certain markets. At some point, this will normalize and increase 10-20%, which would help the luxury side of the portfolio in key gateway destinations in India.”
The Focus on New Businesses
While its established flagship brands will continue to expand, it is the new businesses that IHCL will focus on scaling.
The new businesses vertical includes:
- Budget hotel brand Ginger
- Online gourmet food delivery platform Qmin
- Vacation rentals brand Ama Stays and Trails
- Global membership program The Chambers
- Air catering segment TajSats
As the acquisition of experiential leisure chain Tree of Life has been completed this month, it will also be added under this vertical.
During the quarter, the new businesses vertical reported a 40% growth in consolidated revenue. Over the past few quarters, the company has been spending money on building these new businesses to scale them. “These businesses help to evolve our brandscape and strengthen our competitive advantage with prudent capital allocation in all these strategic initiatives.”
