Indian Hotels Co. Targets Double Revenue, To Hit 700 Properties By 2030

Indian Hotels Co. is aiming to double its portfolio to over 700 properties within the next six years. These plans also include 118 hotels which are under development spanning across 13 countries.

With this growth strategy, the country's largest hospitality company aims to also double its revenue. In its 'Vision 2030' released on Tuesday, the company said that it expects to achieve revenues of Rs 15,000 crore with a 20% return on capital employed.

For its existing properties and identified expansion projects, the company said that it plans to invest up to Rs 5,000 crore over the next five years.

"IHCL remains steadfast in its commitment to realise India’s tourism potential with its vision of ‘Accelerate 2030’, of being the most valued, responsible and profitable hospitality ecosystem in South Asia," MD and CEO Puneet Chhatwal said in a statement.

"Enabling this vision are long term structural tail winds for the sector including India’s forecasted GDP growth of over 6.5%, government’s continued focus on infrastructure spend, hotel demand outpacing supply and the rising affluence of the consumer base."

Under ‘Accelerate 2030’, the focus will be on driving top-line growth with 75% from traditional businesses and management fee while the remaining 25% will come from new and re-imagined businesses, the company said.

Traditional businesses will be enabled by its revenue per available room leadership, asset management initiatives and inventory expansion of existing assets. It expects management fee to cross Rs 1,000 crore by 2030, led by not like-for-like growth and increasing share of managed inventory.

New businesses, comprising of Ginger, Qmin, amã Stays & Trails and Tree of Life will rapidly scale through a capital light route, delivering a revenue CAGR of 30%, according to the company. The re-imagined businesses of The Chambers and TajSATS, will further continue their growth momentum.

"Basis expected strong cash flow generation over the next few years, IHCL will continue to remain net cash positive," said Ankur Dalwani, the company's executive vice-president and chief financial officer in a statement. "We are also committed to our announced dividend policy of distributing 20–40% of PAT to the shareholders leaving sufficient cash balance for future greenfield, accretive inorganic opportunities and strategic cash reserves."

The portfolio expansion will help IHCL to maintain its leadership in the Indian sub-continent.

"International presence will be built in global gateway cities with a focus on capital light route only with the Taj brand," the company said.

Taj, SeleQtions and Vivanta will collectively contribute another 100 hotels to the pipeline. At least three-fourth of the new additions will be driven by boutique leisure offering of Tree of Life, the re-imagined Gateway brand in the upscale segment, Ginger in the midscale segment in line with the consumer trends and growth in tier I and II cities.