Why IHCL said timing was right to acquire Tree of Life

MUMBAI — After forming a strategic alliance with Tree of Life Resorts & Hotels earlier this year, Indian Hotel Co. Ltd. CEO Puneet Chhatwal said the partnership would grow over time. It turned out that IHCL liked the partnership so much that it wanted to own a piece of Tree of Life, too.

On Tuesday, IHCL acquired a 55% stake in Kolkata, India-based Ambuja Neotia Group, the operating company of Tree of Life. IHCL said its board approved an agreement to acquire the stake for an amount not exceeding 18 crore rupees ($2.134 million).

“With each of the IHCL’s hotel brands having achieved optimum scale… the timing was right to expand the brandscape and address emerging formats in India’s fast-evolving hospitality landscape,” Chhatwal told Hotel Investment Today.

Tree of Life, which was launched in 2009 and operates 19 boutique hotels and resorts in 15 India locations (with two in its pipeline), was acquired last October by the Ambuja Neotia Group. Harshavardhan Neotia, chairman of Ambuja Neotia, said the target is to open 100 properties by 2030 under the Tree of Life umbrella.

Harshavardhan Neotia, chairman of Ambuja Neotia, and Indian Hotel Co. Ltd. CEO Puneet Chhatwal

Chhatwal said the deal helps expand IHCL’s portfolio. “In acquiring the Tree of Life brand, we are extending our successful partnership with Ambuja Neotia Group,” he said. “This collaboration aligns strategically, enabling us to spotlight India’s multifaceted leisure offerings, from culture to nature, on the global tourism map.”

In February, IHCL and Tree of Life announced a marketing and distribution alliance where India’s largest hotel company helped the smaller brand with sales, marketing, distribution, loyalty and branding support. It was a fee-based arrangement at the time, but Chhatwal said he didn’t think that would always be the case.

“When the brand develops critical mass, I think we will take over the management in one way or the other or the team will collaborate,” he said. “It will not stay as a purely distributional [partnership].”

IHCL was already managing seven Ambuja Neotia properties, including the Taj Chia Kutir and Taj Guras Kutir in Darjeeling and Gangtok. The company said it will take over the management of the other properties by January. Chhatwal said this move just extends an intentional evolution of the original arrangement.

“This is in keeping with IHCL’s growth strategy to be leaders in the segments we choose to operate both in terms of scale and premium positioning,” he said.

Harshavardhan Neotia said the deal's timing is perfect to grow Tree of Life’s brand. “IHCL has been instrumental in pioneering new destinations and travel segments, placing India on the global tourism map,” he said. “With a proven track record of successfully scaling brands across various formats, we are confident of growing the Tree of Life portfolio with their expertise in developing and operating boutique leisure offerings.”