For corporate entities within the Tata group such as Tata Coffee, IHCL’s venture offers an avenue for monetisation of non-core assets without giving up their ownership. Since Tata Coffee would continue owning the bungalows that it contracts out to IHCL, it will earn a steady stream of revenue from guests staying at these locations.

New initiatives like Ama and the repositioning and expansion of the 115-year-old IHCL’s other brands such as Ginger and SeleQtions is what Chhatwal hopes will allow IHCL to become the “most iconic and profitable hospitality company that South Asia has produced.” As a part of Aspirations 2022, IHCL hopes to improve its EBITDA (earnings before interest, tax, depreciation and amortisation) margin to 25% by FY2022-23 from 17% in FY2017-18.

The company, which runs 178 hotels in 12 countries around the world, hopes to get there by scaling up its inventory, selling non-core assets, and simplifying its holding structure.

In the current financial year (2018-19) till date, IHCL has signed 20 new hotels, out of which 19 are on management contracts. Over the last one year, the share of properties that IHCL runs on management contracts has increased by six percentage points to 38%. Chhatwal says that 2019-20 will be a year of new signings, as well as new hotel openings for IHCL. “We expect to open a minimum of one hotel per month in the next financial year,” he says. Starting April 2019, IHCL will also take over the management of Goa’s iconic resort, Cidade de Goa. This will be a part of IHCL’s range of offerings branded SeleQtions, under which it will operate a bunch of “named” hotels, which won't carry the Taj or Vivanta prefix. Last year. IHCL also bagged the contract to operate the Connaught Hotel in Lutyen’s Delhi, as a part of its SeleQtions range.

Chhatwal says that IHCL’s business reached an inflection point in 2017-18 when it turned in a net profit after making losses in previous financial years, and the company is poised to increase profitability in FY2019. For the nine months ending December 31, 2018, IHCL posted a consolidated net profit of ₹172 crore, up 50% year-on-year. Revenue rose 10% year-on-year to ₹3,314 crore in the same period. In FY2018, IHCL reported a consolidated turnover of ₹4,165 crore and a net profit of ₹101 crore.

Ginger Hotes

IHCL shows the way by tapping Tata group synergy