IHCL plans to double its consolidated revenue, portfolio of hotels by 2030

Ankur Dalwani, executive vice president and chief financial officer, IHCL, stated that the company will continue to remain net cash positive

Tata Group’s hospitality arm and Taj Hotels’ parent company Indian Hotels Company (IHCL) on Tuesday set a target to grow consolidated revenue 2x to Rs 15,000 crore and double the portfolio of hotels to over 700 by 2030.

 

Currently, IHCL has 232 operational hotels out of which 214 are in India. There are 118 properties under development globally across four continents, 13 countries and in over 150 locations. The company has not disclosed specific numbers for the Indian and international markets. 

 

Industry-wise, according to a report released by Hotelivate Research, in terms of number of operational assets in India, IHCL continues to be the number one company, among hotels.

 

 

It is followed by Marriott International, ITC Hotels (including Fortune Hotels and WelcomHeritage), and Radisson Hotel Group, as of August 2024.

 

However, in terms of existing inventory of hotels in the domestic market, Marriott International leads the chart followed by IHCL, Radisson Hotel Group, ITC Hotels (includes Fortune Hotels, Luxury Collection and WelcomHeritage), and Accor, as of August 2024.

 

The company under its ‘Accelerate 2030’ strategy intends to double its consolidated revenue with a 20 per cent return on capital employed (RoCE), IHCL said in its release. 

 

“From a net debt of Rs 3,000 crore in 2017, we have now reached a net cash stage,” said Puneet Chhatwal, managing director (MD) and chief executive officer (CEO), IHCL, at the company’s annual capital markets day.

 

“We're actually debt free with the exception of a small debt in a London property,” he added.

 

Ankur Dalwani, executive vice-president and chief financial officer (CFO), IHCL, said in a statement that IHCL will continue to remain net cash positive.

 

“Our capital allocation framework envisages investments towards strengthening existing set up and building future competitive advantages, through an outlay of up to Rs 5,000 crore over the next five years. This investment is expected to be across existing properties and identified expansion projects. We are also committed to our announced dividend policy of distributing 20-40 per cent of profit after tax (PAT) to the shareholders. This leaves sufficient cash balance for future greenfields, accretive inorganic opportunities and strategic cash reserves,” Dalwani added.

 

The company will expand Taj, its luxury brand from 50 to 120 hotels and Ginger Hotels, a midscale brand from 46 to 100 hotels. It will also grow Vivanta Hotels, a business and leisure brand and The Gateway, IHCL’s upscale hotel brand, to 110 operational hotels by the year 2030.

 

“We will only grow with Taj brand in top international gateway locations, with the exception of anything which is within two to three hours of flying distance from India or is within the Indian subcontinent. There, some other brands may be more relevant, but we are not going to take Ginger to Europe, Switzerland or Scandinavia or the US,” Chhatwal added.

 

Under ‘Accelerate 2030’, IHCL will focus on driving top-line growth with 75 per cent from traditional businesses and management fee and 25 per cent plus from new and re-imagined businesses, according to the company’s statement.

 

Traditional businesses will be enabled by revenue per available room (RevPAR) leadership, asset management initiatives and inventory expansion of existing assets. The management fee is expected to cross Rs 1,000 crore by 2030.

 

New businesses, comprising the company's brands like Ginger, Qmin, amã Stays and Trails, and Tree of Life, will rapidly scale through a capital-light route.

 

It will deliver a revenue compound annual growth rate (CAGR) of 30 per cent plus. IHLC’s re-imagined businesses like The Chambers and TajSATS will continue their growth momentum, the statement added.

 

Chhatwal emphasised that growth will primarily be through the capital-light model.

 

Taj, SeleQtions, a brand with a collection of hotels and resorts, and Vivanta will continue their steady growth, collectively contributing another 100 hotels to the pipeline.

 

Reflective of the emerging consumer trends as well as growth in Tier-I and II cities, 75 per cent of IHCL’s new additions will be driven by the boutique leisure offering of Tree of Life along with its Gateway, and Ginger brands, according to the company’s press release.