THE Indian Hotels Company, which runs India’s Taj chain of hotels, plans to expand its total room capacity by about 30 per cent in two years, according to chairman Ratan Tata, who was speaking at the company’s 105th annual general meeting.
He said combined room capacity was expected to go up from 9,182 rooms at 76 hotels in 17 countries currently to 12,300 in two years for a total of 12,300 rooms in 105 hotels in 21 countries, including owned and managed hotels. This expansion is likely to be across the group’s brands. Over the next calendar year it will cost Rs12 billion ($258 million).
“Globally we are looking for management contracts, and especially so in the Middle East,” Ajoy Misra, the group’s senior vice-president sales and marketing told TTN. Besides a second hotel in Dubai on the Palm Jumeirah, the group is “keen on Bahrain and Qatar and also North African countries such as Egypt and Morocco,” says Misra.
Internationally, the company’s strategy is to have a property in key source gateway cities, Misra said. “In North America, Europe, the Far East, Australia, we would like to have a brand presence at the top end of the market and our focus is firmly on the luxury end of the market. In the Middle East, Africa and the Indian Ocean, we’re looking at more comprehensive, organic growth, certainly more than a token presence.” Thirty per cent of the group’s income comes from its international operations, said Misra.
Domestically, on the other hand, he said, the company is expanding aggressively. “We will retain our domestic dominance, and will continue to play in different price brands and categories,” he said.
At the very bottom of the pyramid, then, IHC has launched a new ‘smart basics’ brand for the domestic market, Ginger, which is not linked to the Taj brand, but is being developed as a standalone chain with hotel rooms under Rs1000 ($21.5) per night. Being developed under the subsidiary Roots Corporation Ltd, the group expects a total of some 30 new Ginger properties in the next two years alone, says Misra. The company has already started Ginger hotels in Bangalore, Hardwar and Bhubaneshwar, and seven more are likely by the end of the year, he says. New cities in the Ginger network will be Pune, Mysore, Thiruvananthapuram, Durgapur, Panjim, Agartala, Tirupur, Pondicherry and Nashik, according to statements made at the AGM.
“We are also resurrecting our [mid-level] Gateway brand and are in the process of developing a prototype for expansion,” says Misra.
Also part of its growth plans are two hotels in the national capital region by 2009, a year before the Commonwealth Games. One of these hotels, to be built at Gurgaon, will be a business hotel and the other one in Delhi will be a luxury hotel.
Additionally, each of the company’s luxury hotels will host a the Taj-brand Jiva Spa, said Misra.
India gets four million international tourists annually, or 0.5 per cent of total global tourist traffic. However, like European countries such as Germany, the Indian government counts visitors according to their passports, thereby miscalculating the international – or expatriate – market.
“The only way to get to India is on a long-haul flight, so there may be only four million international tourists coming to India, but every one of those is a long-haul tourist,” Misra countered. “And all of them are long-staying. The average length of stay is between 24 and 30 days.” Each tourist’s average spend is $150 per day.
Tourism growth in the country is in many cases limited by its capacity, Misra added, pointing to airport infrastructure and limited hotel capacity in some cities.
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