‘Travel and tourism poised for continued growth’

April 30, 2023 12:00 am | Updated 05:43 am IST

India’s domestic growth is extremely strong and is being led by domestic tourism at the moment, be it for business or leisure, says IHCL’s CEO

Puneet ChhatwalBy arrangement

Puneet ChhatwalBy arrangement

In FY23, Indian Hotels Company Ltd. (IHCL), the hospitality company of the Tata Group, owning and operating Taj, Vivanta and Ginger hotels, reported a net profit of Rs. 1,003 crore against a loss of Rs. 265 crore a year earlier, thus offsetting the compound losses incurred during the COVID years. Now, with multiple businesses set to yield better results, the company is on a high growth path, said MD & CEO Puneet Chhatwal. Edited excerpts:

What has led to this growth despite the global economy not doing well?

India’s domestic growth is extremely strong and our growth is being led by domestic tourism at the moment, be it for business or leisure. We have the highest market share. We witnessed consecutive four quarters of sustained high demand resulting in an all-time high full year consolidated revenue of Rs. 5,949 crore and the highest ever EBITDA margin of 32.7% and PAT of Rs. 1,003 crore.

Can this pace of growth be sustained?

The travel and tourism sector is poised for continued growth. Despite the challenges posed by the COVID-19 pandemic, the sector has demonstrated remarkable resilience and adaptability, and we have seen strong demand for travel and tourism across the country.

Demand will continue to outstrip supply, as travel is still on the cards for people. We expect this trend will continue driven by a number of factors which includes India’s strong GDP growth, upcoming national and international events like the World Cup and G20 Summit, recovery in foreign tourist arrivals and continued domestic demand.

What is Ginger’s contribution to growth?

Ginger has a revenue of Rs. 307 crore, EBITDA margin of 39%, an increase in 12 percentage point and another 12 percentage you can factor going forward. This brand should definitely, in the next 2 years, deliver every quarter, more than 50% margin.

Recently the Taj achieved the 100 hotel-portfolio mark. What is the current total portfolio and what is in the pipeline?

Starting its journey in 1903 with the flagship The Taj Mahal Palace, Mumbai, Taj has more than doubled its inventory in the last five years. IHCL has a total of 263 in the portfolio out of which 75 hotels are in the pipeline and 188 being in operation. We have now around 22,000 operational rooms and another 10,000 under development. We are 50% asset-light and 50% where we own or lease the asset.

How have the new businesses performed?

Under the new businesses, Qmin has now grown to 34 outlets with a presence across 24 cities and amã Stays & Trails has witnessed a 42% growth in portfolio this fiscal reaching 114 bungalows across 50+ locations. In line with our strategy of Ahvaan 2025 Vivanta and SeleQtions have already exceeded their targeted portfolio of 75 hotels.

Tatas have invested heavily in the airlines business. How has that helped TajSATS?

TajSATS is an industry leader in airline catering with a market share of 58% in FY2022-23. It clocked a revenue of Rs. 641 crore which is enabled by the growth in productivity. Meal production went up by 69% compared to pre-COVID levels. The company added new capacity with new kitchens in Amritsar and new airport at Mopa, Goa. Through higher volumes and better yields the company also achieved its highest annual EBITDA margin of 19.7%.

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