Indian Hotel Stock Price: Indian Hotel’s Puneet Chhatwal Sees Multi-Year Uptrend in Hospitality Industry

“We will now try to aim higher without losing sight and focus on the domestic market. We want domestic activity to never be less than 80% of total activity and total revenue as it should be. Today, it’s more like 83% to 85%. It all depends on currency fluctuations,” says Puneet ChhatwalCEO and CEO,

The current term is considered a slow term, cyclicality comes into play, schools start and it is the term just before the holiday season. So historically the current quarter is always a weak quarter, but channel checks indicate that this might be one of the slowest quarters you’ve had.

I think it would be fair to say, if I say on behalf of the industry. The industry is performing…

You switch very intelligently between your company and your industry.

I think the industry is performing over 20% pre-Covid on turnover and in the case of Indian hotels the turnover is a bit higher. We are very positive about the outlook, especially this year and the reason I have is a strong belief in India’s history. I strongly believe that we are focused on growing our Indian footprint to over 100 locations in India over the past five years. No one covers India like us. If we add homestays to that, that’s 125 destinations and with the arrival of the G20 leadership in India from December, for the following 12 months, it will give that extra boost. If anything else should happen, it will provide a natural hedge. Currently, the hotel industry is well positioned.

You have increased what is called the moat around your business. You grew when everyone else was outsourcing, you were hiring when others were laying off, you incubated new brands when other brands were closing or consolidating. What have you done in the Covid to increase the moat of maybe the reach of Indian hotels?

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I think some of these ideas were never imagined. They have evolved over time, but digitization is one aspect that has helped us. The second thing that has helped us is being a company over 100 years old. We were sitting on a lot of assets. The idea was how to manage assets efficiently so that they become productive. Not only have we been able to increase productivity based on our business overhead that has been reduced by almost 30% adjusted for inflation, but that business overhead now serves a much larger portfolio of hotels and brands. Efficiency has therefore increased. Also leveraging partnerships, leveraging other Tata Group companies.

When the hospitality industry started making a comeback in 2021, the loosely used media term was that it was a sugar rush, more like a revenge trip by people who have been locked up for a long time and that it won’t last. However, the gauges indicate that prices have not fallen. What used to be called revenge travel, the sugar rush has now become a trend, right?

Many new segments have evolved that didn’t exist in the pre-Covid era and I think the first time for anyone who had never driven on vacation themselves was a tough call.

The second time was a less difficult decision. Now for anyone who’s done this it’s a game let us get in the car and take an extra day off or work with good wifi digitally for a day you put your whole meeting and have a long weekend and that’s a no-brainer. This did not happen before.

Everyone thought leisure tourism was leading, but leisure has really become bleisure, business coupled with leisure. Lots of things are happening, but also lots of new destinations have popped up. We witnessed this in Rishikesh. Then we opened another near Rishikesh, then we opened in Haridwar. Our Pilibhit house in Haridwar runs at rates which, despite my 40 years of experience in the hospitality industry, I never thought would create this kind of demand.

In Darjeeling, when we opened the hotel – Taj Chia Kutir – it was off to a flying start. So there are a lot of new destinations.

So, at a higher level, supply and demand match?

Demand and supply – no, demand exceeds supply. It still tops out as very little has happened on the supply side during Covid. Demand will therefore continue to exceed supply. Also, at some point, international travelers are going to return, between October and March.

Additionally, large MICEs, which are meetings, incentives, conferences, congresses, and events, have started happening. We had our very big Tata Connect event in May in Goa and after that we saw that many Tata companies booked the same venue, same room for their annual business conferences. The best in terms of demand is yet to come and supply will remain constrained.

It’s a multi-year trend according to you.

This is a multi-year trend.

Indian Hotel is now part of an elite club in terms of market capitalization. What are your ambitions for Indian Hotel in the next three to five years. Is it no longer a cyclical activity, are we witnessing structural growth?

We will now try to aim higher without losing sight and focus on the domestic market. We want domestic activity to never be less than 80% of total activity and total revenue as it should be. Today, it’s more like 83% to 85%. Everything depends on currency fluctuations, but if we can keep 80% national currencies, 20% international, grow in certain markets, keep our Indian philosophy, the culture of Taj, what it represents for confidence, consciousness and joy, I see no reason why we shouldn’t emerge as the top five hotel companies in the world not by size but because of the culture, value and respect we have earned from all stakeholders.


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