Indian Hotels Company Ltd (IHCL), which runs the luxury hotel brand Taj Hotels, leveraged its newer verticals in the
homestay and food delivery segments during the pandemic to drive up revenues. Puneet Chhatwal, MD & CEO, tells Christina Moniz about the company’s expansion plans, factors that are aiding recovery for the hospitality sector, and more. Excerpts:
IHCL reported its first profit since the pandemic — `76 crore in Q3 of FY22. What drove growth and recovery?
The upswing in domestic demand and improvement in international markets are key factors here. With an EBITDA margin of 30.4% in Q3 this fiscal, the company’s performance is closely reflective of pre-pandemic levels.
As current trends indicate, leisure domestic travel will continue to lead the industry’s growth. Developed destinations at driving distance from metro cities have been witnessing increased footfalls. Destinations such as Goa, Kerala and Rajasthan, which have been on the tourism map for decades, continue to do well.
Corporate travel has resumed with the resurgence visible in March and is picking up pace from April. The opening of international travel will also lead to a strong recovery in business travel. In India, meetings, conferences and weddings are strong segments. These will continue to drive growth. India’s travel market is projected to reach `12,500 crore by FY27, which will further aid the sector’s growth.
How are your new businesses, amã Stays & Trails and Qmin, performing?
We launched ‘amã Stays & Trails’ as a premium branded product in India’s fast-growing homestay market. We accelerated the brand’s growth during the pandemic as we saw consumer behaviour gravitating towards ‘bubble holidays’, with a strong preference for private stays with safety and social distancing measures. Since its launch, amã has profitably scaled up to over 75 bungalows and we are targeting a portfolio of 500 properties over the next few years.
Qmin was developed to cater to the growing demand for food delivery. Since its launch in mid-2020, it has expanded to 20 cities and is expected to be in 35 cities over the next few years. It is an independent business vertical addressing multiple market segments, and makes for a significant alternate revenue stream. Aside from the Qmin app, we have broadened its scope to include outlets offering a café experience and Qmin – On The Move, the food truck. We currently have 15 of these outlets across Delhi, Mumbai and Bengaluru.
But how sustainable will these new verticals be in the post-pandemic market?
We looked at the disruption caused by the pandemic as an opportunity to re-imagine our business. Both Qmin and amã Stays & Trails leveraged IHCL’s existing infrastructure and network and have established themselves, without the need for infusion of fresh investment.
amã works on a hub-and-spoke model, where every bungalow is supported by an IHCL hotel in close proximity. With Qmin, we developed our own platform that allowed us to have better control over the quality of service and delivery. Our culinary offerings from across IHCL’s restaurants, coupled with a dedicated delivery fleet while maintaining the highest safety standards, gives us a competitive edge.
What are your expansion plans for 2022?
In addition to focussing on our new businesses, we will continue on our path of growth and hotel portfolio development. This includes our strategy of signing and opening new hotels. IHCL now has a portfolio of 232 hotels, including 59 under development, across all our brands. And in keeping with our strategy of creating value through an asset-light approach, a majority of our new signings are management contracts.
This year, we will open 16 to 18 hotels with an inventory of over 2,000 rooms by December. This means, on an average, we will open more than one hotel a month, including four Taj branded hotels, three SeleQtions hotels, four Vivantas and six Ginger hotels.
We will also further strengthen the hospitality ecosystem by expanding the Qmin and amã Stays & Trails brands. The Chambers, which is an exclusive business club and currently in eight locations, will expand to global destinations including New York.
We also have a large portfolio of food and beverage outlets, with over 400 restaurants and bars. We will continue to build on these culinary brands and scale up new ones such as the brewpub Seven Rivers in Bengaluru, which will soon launch in Goa.
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