Indian Hotels Company Ltd (IHCL) is to launch an uspscale hotel brand to deepen its presence in the country.
The new brand will provide F&B and banqueting facilities, which will enable IHCL to tap growth in new markets, and even expand its presence in existing locations.
The hotel chain announced plans to launch a new brand after its third-quarter results on Friday. It operates 200 properties in hundred locations in India and overseas. These are spread in four segments - Taj (luxury), Vivanta (upscale), Ginger (economy-midscale) and SeleQtions (a collection of distinctive hotels in cities and leisure locations). Both SeleQtions and a home stay brand called amã Stays & Trails were launched in 2019.
While IHCL will continue to expand its Ginger brand, it needs a brand on the lines of Vivanta to cater to the mass market of 400-500 million residents in tier-II and III cities, MD & CEO Puneet Chhatwal, told analysts in a post-result conference call. While the Ginger brand is good for every district capital, it doesn’t have banquet facilities, which are in demand in tier-II and III cities.
The new hotel brand could have average rates of Rs 8,000-9,000. Chhatwal said the company will look at opening 50 hotels under the new brand in a short period of time.
At present IHCL has another 85 hotels in the pipeline, which are being developed under its Ahvaan 2025 plan that targets a portfolio of 300 hotels by FY2025-26. While IHCL is poised to meet the target ahead of time, the new brand will be used to accelerate expansion beyond the targeted 300 hotels
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The group opened 16 properties in FY 2024, and will add another four by March-end. These will come up at Tirupati, Munnar, Jamshedpur and near Ahmedabad. In FY 2025, it will open two hotels every month, with a focus on double-digit revenue growth and management contract-led expansion. In fact, the room inventory under management contracts has grown 75 per cent over the last four years, and management fee earned has doubled in the same period.
“The brand legacy of Taj Hotels is very strong. A new brand with a focus on food and beverage service, will enable the chain to connect with aspirational consumers in tier-II and III cities. Thus, it has an opportunity to develop brands that sit between Ginger and Vivanta, and Vivanta and Taj. This way it can also build up an edge over the competition,” said Nandivardhan Jain, Founder and CEO of Noesis Capital Advisors.