 "Taj sharpens its luxe appeal")
Mumbai is all set to get a new Taj hotel (its third in this city) in the next few weeks. Its parent, the Tata Sons-promoted Indian Hotel Company (IHCL), will throw open the doors to a 279-room property just outside the domestic airport.
The new luxury property, aimed primarily at the business traveller, includes 22 suites. A stone's throw away from the terminal 1C of the domestic airport, the hotel is a significant move by the India's oldest and largest hotel group.
The hotel will be the first property by the group in nearly five years, under the luxury Taj brand. The last property under the Taj flag was the Falaknuma Palace that opened in 2010. Since then, the group has focused on ramping up its other sub-brands down the value chain, by opening several properties under Vivanta by Taj, Gateway and Ginger.
"With the opening of Taj Santacruz, the Taj will have 18 luxury properties in India with 20 per cent of the market supply in this category. The new luxury hotel is in the centre of Mumbai's business hub. The architecture of the hotel is inspired by the city of Mumbai and it is the new luxury address in the birth-city of our company", says a IHCL spokesperson.
IHCL has one of the largest inventories in the luxury space with Taj, with 17 properties and 2,989 rooms operational in India.
Luxury brands of foreign chains such as Intercontinental Hotels Group, Starwood Hotels and Resorts, Marriott, Hyatt Hotels, Four Seasons, Shangri-la, Kempinski, Hilton, Accor, Wyndham and MGM Grand are already in India.
Dilip Puri, managing director, India and regional vice-president, south Asia, Starwood Hotels and Resorts, says, "We will focus on both of our luxury brands, W and St Regis, in 12 months, as we launch hotels under both. Once they are established, once you see the flag flying they will gain traction and there will be more launches."
The shift towards the luxury segment is understandable. According to HVS, the hospitality consultancy, both occupancy and average room rate in the luxury segment were higher than the average in the industry. With an average tariff of Rs 8,774, the luxury segment was much higher than the overall average tariff of Rs 5,531, last year. With occupancies of 60.5 per cent, it stood higher than the average of 58.9 per cent recorded by the industry.
For Taj, the numbers outpace its competition. "Occupancy varies according to the season. The yearlong average occupancy is 70-75 per cent, while average room rate varies according to the season and location of the hotel. The average room rate for the luxury hotels is Rs 13,000-15,000", says the Taj spokesperson.
IHCL rebranded one of its Taj-branded properties (Taj President, Cuffe Parade) to Vivanta by Taj four years ago. It owns and operates the Taj Mahal Palace, Apollo Bunder, and the Taj Lands End, Bandra in Mumbai.
With Mumbai being the financial capital and also hosting Taj's most profitable property (Taj Mahal), the competitors have set their eyes on the city. At least five new luxurious properties are set to welcome guests in the city over the next two years. The list includes JW Marriott (set to open this month), Ritz Carlton (2016-17), St Regis (this year), W and Jumeirah.
Nikhil Dhodapkar, regional director, sales and marketing, India, Accor Hotels (has Sofitel in luxury), says, "If you look at the business sentiment, it looks positive. A lot depends on the city the property is being built in. Luxury hotels are detailed and take time to build."
According to HVS, it takes an average of four years and Rs 2-4 crore a key to build a luxury property. Recovery of the investment takes anywhere between six-seven years, according to estimates.
Despite the flow of new inventory, the Indian market is far from reaching saturation in the luxury space. India has the lowest luxury room penetration amongst the developing economies. "There is space to grow for everyone. Luxury is always aspirational, as people are moving up from 5-star to luxury", says Puri.
Taj, which was founded in 1903, is the principal brand and revenue builder for IHCL.
With IHCL shifting its focus to its sister brands, new property openings have been slow for Taj.
Its claimed market share of 20-25 per cent, and the premium of 10-15 per cent it enjoys over competition in tariff, will surely be challenged in the next few years.
The new luxury property, aimed primarily at the business traveller, includes 22 suites. A stone's throw away from the terminal 1C of the domestic airport, the hotel is a significant move by the India's oldest and largest hotel group.
The hotel will be the first property by the group in nearly five years, under the luxury Taj brand. The last property under the Taj flag was the Falaknuma Palace that opened in 2010. Since then, the group has focused on ramping up its other sub-brands down the value chain, by opening several properties under Vivanta by Taj, Gateway and Ginger.
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The competition, meanwhile, has been charging on. More than a dozen luxury brands of companies headquartered in the US, Canada, Germany and China have made their way to India with a robust pipeline, all in the hope of taking a slice of the luxury pie.
"With the opening of Taj Santacruz, the Taj will have 18 luxury properties in India with 20 per cent of the market supply in this category. The new luxury hotel is in the centre of Mumbai's business hub. The architecture of the hotel is inspired by the city of Mumbai and it is the new luxury address in the birth-city of our company", says a IHCL spokesperson.
IHCL has one of the largest inventories in the luxury space with Taj, with 17 properties and 2,989 rooms operational in India.
Luxury brands of foreign chains such as Intercontinental Hotels Group, Starwood Hotels and Resorts, Marriott, Hyatt Hotels, Four Seasons, Shangri-la, Kempinski, Hilton, Accor, Wyndham and MGM Grand are already in India.
Dilip Puri, managing director, India and regional vice-president, south Asia, Starwood Hotels and Resorts, says, "We will focus on both of our luxury brands, W and St Regis, in 12 months, as we launch hotels under both. Once they are established, once you see the flag flying they will gain traction and there will be more launches."
The shift towards the luxury segment is understandable. According to HVS, the hospitality consultancy, both occupancy and average room rate in the luxury segment were higher than the average in the industry. With an average tariff of Rs 8,774, the luxury segment was much higher than the overall average tariff of Rs 5,531, last year. With occupancies of 60.5 per cent, it stood higher than the average of 58.9 per cent recorded by the industry.
For Taj, the numbers outpace its competition. "Occupancy varies according to the season. The yearlong average occupancy is 70-75 per cent, while average room rate varies according to the season and location of the hotel. The average room rate for the luxury hotels is Rs 13,000-15,000", says the Taj spokesperson.
IHCL rebranded one of its Taj-branded properties (Taj President, Cuffe Parade) to Vivanta by Taj four years ago. It owns and operates the Taj Mahal Palace, Apollo Bunder, and the Taj Lands End, Bandra in Mumbai.
With Mumbai being the financial capital and also hosting Taj's most profitable property (Taj Mahal), the competitors have set their eyes on the city. At least five new luxurious properties are set to welcome guests in the city over the next two years. The list includes JW Marriott (set to open this month), Ritz Carlton (2016-17), St Regis (this year), W and Jumeirah.
Nikhil Dhodapkar, regional director, sales and marketing, India, Accor Hotels (has Sofitel in luxury), says, "If you look at the business sentiment, it looks positive. A lot depends on the city the property is being built in. Luxury hotels are detailed and take time to build."
According to HVS, it takes an average of four years and Rs 2-4 crore a key to build a luxury property. Recovery of the investment takes anywhere between six-seven years, according to estimates.
Despite the flow of new inventory, the Indian market is far from reaching saturation in the luxury space. India has the lowest luxury room penetration amongst the developing economies. "There is space to grow for everyone. Luxury is always aspirational, as people are moving up from 5-star to luxury", says Puri.
Taj, which was founded in 1903, is the principal brand and revenue builder for IHCL.
With IHCL shifting its focus to its sister brands, new property openings have been slow for Taj.
Its claimed market share of 20-25 per cent, and the premium of 10-15 per cent it enjoys over competition in tariff, will surely be challenged in the next few years.