Indian Hotels Company Ltd (IHCL) is set to continue its expansion drive, with plans to open over 50 hotels across its various brands in the next couple of years. This ambitious growth is fueled by a strong pipeline of projects, supported by a promising demand outlook in the hospitality sector.
The company has surpassed the milestone of having a portfolio of over 300 hotels, encompassing all five brands – Taj, Vivanta, SeleQtions, Ginger, and Tree of Life. Currently, 218 hotels are operational, while approximately 92 hotels are in the pipeline for development. Puneet Chhatwal, MD & CEO of Indian Hotels Company Ltd, stated that last year they signed agreements for 53 hotels and opened 20 (excluding Tree of Life). This year, they aim to open at least 25 hotels, followed by a minimum of 30 hotels next year.
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Chhatwal believes that despite facing temporary challenges, the hospitality industry’s upward cycle will endure for a considerable period, remaining robust and sustained.
The company, with a consolidated revenue of INR 6,952 crore, anticipates a capital expenditure of INR 2,500 crore over the forthcoming three years. This investment is aligned with its objective of deploying INR 3,500 crore for expansion between FY23 and FY25. Currently, it operates in over 130 cities across India.
The hotel supply is projected to expand at a compound annual growth rate (CAGR) of 8 percent over the upcoming three years, reaching approximately 2.41 lakh rooms by FY2027, compared to 1.88 lakh rooms in FY24. Around 60 percent of this supply is expected to be outside the top 10 destinations.
“Due to the increasing number of travelers, there’s a robust demand for hotel rooms, yet the supply is limited, resulting in higher occupancy rates. Increased occupancy enables higher pricing, consequently boosting profits. As profitability rises, so does reinvestment in the business,” he explained.
IHCL also intends to launch its latest brand – a reimagined rendition of Gateway, which will serve as a full-service hotel offering in the upscale segment. The introduction of this brand will kick off with 15 hotels, and the portfolio is anticipated to expand to 100 by 2030.
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