Tatas to go a notch below luxury hotels in Africa

To set up lower-tariff 'business' hotels, vehicle assembly plants

The Tata Group is planning to get into the business hotel category in Africa, according to a top company official. At present, the group operates only two hotels in this market, both luxury, in Lusaka (Zambia) and Cape Town (South Africa).

The group is expanding the hospitality business in Africa, said Raman Dhawan, managing director of Tata Africa Holdings, a wholly-owned subsidiary of Tata International. Several proposals are under consideration, according to Dhawan, who, along with many other top executives of the group, was interacting with the media here today on its Africa business.

Overall, the Tata Group is looking at an annual revenue growth of 30 per cent from its African business. Currently, its revenue from Africa operations is pegged at $2.3 billion, spread over nine companies and 20 countries. It has committed an investment of $1.7 billion so far in Africa. The total Tata Group turnover topped $100 billion last year.

Even as the Tatas have focused on luxury hotels in the international market, Africa could be different. The expansion might be in the business segment, catering to the needs of the Africa market, Dhawan pointed out.

Indian Hotels Company, the hospitality business of the Tatas, has maintained that it was important to expand its presence internationally to protect its market share, with competition growing in the space. Recently, Raymond Bickson, managing director of Indian Hotels Company Limited, had said the group had plans to build its presence in markets such as China, Africa, West Asia and Cuba by opening 10 hotels, primarily luxury properties of Taj and also a few Vivanta hotels. Vivanta is branded as a premium business hotel.

The group currently operates 17 hotels internationally, and 100 within India. Over the next six years, Tatas are looking at a bouquet of 200 hotels.

Tata Motors, which has an assembly plant in South Africa, is looking to open new plants in that market through local partners, said R T Wasan, head of Tata Motors international business (commercial vehicles business unit). Tunisia and Kenya are the two markets being explored for setting up assembly plants for light and medium commercial vehicles.

On Nano, the smallest car from the Tata stable, company executives said it was not being exported to Africa yet, but it is being “evaluated”.

Tata Consultancy Services (TCS), the largest software company of the country, is also eyeing a bigger share in the African market. Dhawan said TCS was growing well in Africa, and that there were plans to take consultancy in a big way to that market. It has begun with Kenya, Uganda and Zambia, and is looking at other countries, too.

Tatas entered Africa in 1977 with distribution of vehicles.