Puneet Chhatwal
Managing Director and Chief Executive Officer
I am happy to present to you the Annual Report of The Indian Hotels Company Limited (IHCL) in a year we have done well and my first as its Managing Director and Chief Executive Officer. It is also the year the Tata group is celebrating its 150th anniversary, an illustrious history in which we have played a significant role with a 115-year presence ourselves.
The global travel and tourism industry posted a strong showing in the financial year, growing at 4.6%, with particularly good performance in Asia. This had a positive ripple effect on the hospitality sector in India, which had been struggling with declining room occupancy and pricing. The fiscal saw demand growth at 5.0%, continuing to outpace supply growth at 3.2%, primarily due to the rising purchasing power of domestic travellers, an increase in commercial development and foreign tourist arrivals, a growing airline industry and Government-led initiatives aimed at stimulating the sector. These include branding and marketing outreach and allowing 100% FDI in the hotel and tourism sector through the automatic route.
During the year, we registered strong profitability even as revenues grew at a moderate pace. Our continued efforts to drive cost efficiencies and strengthen our balance sheet have already started yielding results.
Customers across the world now expect hospitality to adapt to their evolving needs and partner them through their professional and personal journeys. At IHCL, we have always set benchmarks in service quality and our global portfolio demands that we continuously reinvent ourselves for the future to check in. We are driving this transformation with a five-year growth map – Aspiration 2022 – that provides a template for us to grow profitably and sustainably.
Aspiration 2022 will lead us to re-structure our operations and re-engineer processes in a larger effort to re-imagine our engagement with all stakeholders. Re-structuring entails a continuous and careful re-examination of your Company’s existing portfolio to unlock value from efficiencies in scale and simplify the holding structure for greater profitability and a growth in EBITDA margins. IHCL will also be at the forefront of change in the hospitality industry as it re-engineers systems and processes and embraces technology.
Your Company is re-imagining itself by leveraging its strong brand equity to multiply its portfolio while aligning to high-growth segments. This includes manoeuvring excellence and reinvigorating the portfolio across all brands. While the iconic Taj and Vivanta will be retained as the dominant brands in the luxury, upper upscale and upscale segments, Ginger will have a significant presence in the IHCL brandscape. It will address your Company’s drive to be present in the fastest growing segment.
The brand will take on a fresh avatar to address the needs and aspirations of the new and younger customer segments.
Integral to your Company’s strategy of reinforcing the multi-product, multisegment brandscape is our customer. The service ethos, epitomised in what we call Tajness, is the soul of IHCL. With competition becoming stiffer, there is a stronger case than ever to communicate the merits of Tajness as a key differentiator. Hence, we have redefined Tajness – as Trust, Awareness and Joy – the trust that our guests, associates and stakeholders place in us; the awareness of what is happening around us and what we need to do as responsible members of the Indian hotel industry, and to do something effectively, we must enjoy what we do; we must do it joyfully.
IHCL is a multi-faceted global Company. Our strategy for the future hinges on diversifying our revenue streams and utilising our products and service brands more effectively, which is why we are reimagining IHCL’s own brand positioning. One that emphasises it is the largest hospitality Company in the subcontinent with true Indian origins and that allows it to go beyond the current offerings, ranging from luxury palaces to budget hotels and other B2B verticals like TajSATS. Based on the philosophy of Power of One, your Company has launched ‘One IHCL’ to create an identity that unites its brands and businesses. This new identity will help unlock the equity of ‘nestled’ brands such as Khazana, Jiva and F&B brands, among others. Moreover, your Company can create new business drivers such as shared economy models to transcend traditional businesses. This will fuel growth by attracting partners and talent for IHCL as a group rather than as Taj alone.
We have inculcated our parent Tata group’s culture of growing responsibly and believe environmental stewardship is a precondition for our operations. We are pursuing excellence in facility management systems and procuring local and sustainable materials remains our priority. We support the Skill India movement that focusses on delivering quality training, apart from leveraging our supply chain to enable livelihood opportunities for surrounding communities. Heritage conservation and community upkeep projects run by our hotels continue to contribute to the prosperity of the destinations in which we operate.
Before closing, I want to extend my heartfelt gratitude to all the employees of IHCL who dedicate their best to the organisation – empowering it to conquer new horizons.
I count on your continued support as we aspire to drive profitable growth and maximise value for all our stakeholders in a sustainable manner.
Best Regards,
Puneet Chhatwal
© The Indian Hotels Company limited 2018. All Rights Reserved.
