IHCL plans to double portfolio revenue by 2030

MUMBAI, India — The Indian Hotels Co. Ltd. (IHCL) said it will add new brands, double both its portfolio and revenue and produce a 20% return on the capital it uses as part of its strategic growth plan for 2030 released this week.

“IHCL has surpassed its guidance by achieving a portfolio of 350 hotels, with over 200 hotels in operation and delivered 10 consecutive quarters of record financial performance,” said Puneet Chhatwal, managing director and CEO of IHCL. “This strong performance, coupled with a robust balance sheet, positions us well to accelerate our growth momentum.”

IHCL CEO Puneet Chhatwal

Chhatwal said IHCL sees long-term tailwinds that will aid this growth, including India’s forecasted GDP growth of over 6.5%, the government’s continued focus on infrastructure spending, hotel demand outpacing supply and the rising affluence of India’s consumer base.

“IHCL remains steadfast in its commitment to realize India’s tourism potential with its vision of ‘Accelerate 2030,’ of being the most valued, responsible and profitable hospitality eco-system in South Asia,” Chhatwal said. 

Inside the plan 

Different facets of the “Accelerate 2030” plan include:

• IHCL said it has earmarked CapEx of ₹5000 crore to double its portfolio size from 350 hotels (232 operational) to over 700 by 2030 (with more than 500 being operational by that time).
• While the company said it plans to expand its portfolio internationally (mostly with an asset-light approach through its Taj brand), IHCL said 80% to 90% of its growth will still come from inside India.
• IHCL’s plan to drive top-line growth will include 75% coming from traditional businesses and management fees and 25%-plus coming from new or re-imagined businesses. The company also said it expects management fees to cross ₹1,000 crore by 2030.
• The company said its new hotel brands, including Ginger, Qmin, amã Stays & Trails and Tree of Life, will rapidly scale through an asset-light approach and deliver a revenue CAGR of 30%-plus. The re-imagined businesses, including The Chambers and TajSATS, will also continue their growth momentum.
• IHCL’s evolution of its brands will include the branded residence business it announced earlier this year and newer brands like the addition of The Claridges in the luxury segment.
• The company said its Taj, SeleQtions and Vivanta brands will continue their steady growth and collectively add another 100 hotels to the pipeline in the next five years.
• IHCL also said it will continue its growth in Tier I and II cities in India, with 75% of its new additions being driven by the boutique leisure offering of Tree of Life (which it acquired earlier this month), the re-imagined Gateway brand in the upscale segment and Ginger in the midscale segment.

In an interview with Hotel Investment Today earlier this year, Chhatwal said that while IHCL’s growth will be steady, and scale is important, value creation is even more important.

“In any business that we are in we want to be perceived as the premium in that business,” he said. “If we are in upscale, we should be perceived as the best brand… If we are in that full-service, upper midscale or upscale, we want to be the best in class in those brands because if you don’t do that, it will damage the Taj brand.”