Indian Hotels: Uncovering Hospitality Opportunities in the Market

“We will continue on our journey of balancing the portfolio, not investing into single assets except for very key strategic investments like the Ginger in Santacruz or our combo development Vivanta and Ginger in Ekta Nagar which is Kevadia or where the Statue of Unity is, totaling 275 rooms. But there, we also get, we are eligible to get certain subsidies, making the investments very feasible. I think the outlook remains strong, and we are at the beginning of an upcycle, which has witnessed a few quarters. And we feel that Indian Hotels is very well positioned to take benefit of this upcycle.”
-Puneet Chhatwal, Managing Director & CEO

Stock Data

Ticker	INDHOTEL
Industry	Restaurant
Exchange	NSE & BSE

Share Price

Last 1 Month	9.9%
Last 6 Months	23.5%
Last 12 Months	88.9%

Business Basics

Indian Hotels Limited (IHCL) is a renowned hospitality company that owns and operates hotels and resorts across India and several international destinations. With a rich legacy spanning over a century, IHCL is recognized for its iconic brand, Taj Hotels, known for its impeccable service, luxurious accommodations, and culinary excellence. IHCL operates in various segments of the hospitality industry, offering a range of services to cater to different customer preferences and needs. The company’s portfolio includes luxury hotels, resorts, palaces, and business hotels, each designed to provide a unique and memorable experience to guests.

IHCL’s key focus is on delivering exceptional hospitality and personalized services that reflect India’s rich culture and heritage. The company strives to create a warm and welcoming environment for its guests, ensuring their comfort and satisfaction throughout their stay. With a deep commitment to quality, IHCL maintains high standards across all aspects of its operations, from the aesthetics and comfort of its properties to the professionalism and expertise of its staff. In addition to its hotel operations, IHCL has expanded its offerings to include various lifestyle and dining experiences. The company operates signature restaurants, bars, and lounges that showcase culinary diversity, featuring both traditional Indian cuisine and international flavors. IHCL also offers wellness facilities, spas, and recreational activities to enhance the overall guest experience.

IHCL’s commitment to sustainability and responsible tourism is evident through its initiatives in environmental conservation, community engagement, and employee welfare. The company is dedicated to minimizing its environmental footprint, promoting local cultural heritage, and supporting the communities in which it operates. With a strong presence in India and a growing international footprint, IHCL continues to expand its portfolio by entering into strategic partnerships, acquisitions, and management contracts. The company’s vision is to be a globally recognized hospitality brand, offering exceptional experiences and setting new benchmarks in the industry. IHCL’s business success is driven by its focus on customer satisfaction, operational excellence, and continuous innovation. By blending tradition with contemporary hospitality trends, IHCL aims to exceed the expectations of its guests and create lasting memories that reflect the true essence of Indian hospitality.

Q4 FY23 Financial Performance

Indian Hotels Company Limited reported Total Income for Q4 FY23 of ₹1,654.54 Crore up from ₹954.88 Crore year on year, a growth of 73.3%. Consolidated Net Profit of ₹338.84 Crore, up 373% from ₹71.57 Crore in the same quarter of the previous year. The Earnings per Share is ₹2.31, up from ₹0.56 in the same quarter of the previous year.

Indian Hotel’s Brand Portfolio

Indian Hotels Limited (IHCL) owns and operates several iconic brands that cater to different segments of the hospitality industry. These brands are renowned for their unique offerings and distinctive experiences, showcasing the diversity and richness of Indian hospitality.

Taj Hotels: Taj is IHCL’s flagship brand and represents the epitome of luxury and elegance. Taj hotels are synonymous with impeccable service, world-class amenities, and timeless architectural designs. From grand palaces to city center hotels, Taj properties offer a harmonious blend of traditional Indian hospitality and modern comforts.

SeleQtions: SeleQtions is a collection of hotels and resorts that celebrate individuality and authenticity. Each SeleQtions property is handpicked for its distinct character, reflecting local heritage and culture. Guests can expect personalized experiences and a deep connection to the destination’s history and traditions.

Vivanta: Vivanta hotels are contemporary and stylish, offering a vibrant and energetic atmosphere. These hotels cater to the needs of modern travelers who seek a blend of comfort, convenience, and sophistication. Vivanta properties feature chic interiors, innovative dining concepts, and state-of-the-art facilities.

The Gateway Hotels: The Gateway brand focuses on providing upscale accommodation and warm hospitality to business and leisure travelers. These hotels are strategically located in key business and leisure destinations, offering well-appointed rooms, efficient service, and a relaxed ambiance.

Ginger Hotels: Ginger is IHCL’s value segment brand, catering to the needs of budget-conscious travelers. Ginger hotels provide smart and efficient accommodations with essential amenities and a hassle-free experience. These hotels are known for their contemporary design, affordability, and convenient locations.

Each of these brands under the IHCL portfolio offers a distinct value proposition and caters to different customer segments and preferences. Whether it’s the luxury of Taj, the uniqueness of SeleQtions, the contemporary style of Vivanta, the convenience of Gateway, or the affordability of Ginger, IHCL ensures that guests have a wide range of options to choose from based on their preferences and budget.

Analysis of Hotel Industry in India

The hotel industry in India has experienced substantial growth and transformation over the years. As a country known for its diverse culture, rich heritage, and growing tourism sector, India offers significant opportunities for hotel businesses. India has emerged as a popular tourist destination, attracting both domestic and international travelers. The country’s rich cultural heritage, historical landmarks, natural beauty, and diverse cuisine contribute to its appeal. This growth in tourism has driven the demand for hotels across various segments, including luxury, mid-scale, and budget.

Average room rate (ARR) and revenue per available room (RevPAR) are the key performance indicators (KPIs) used by the industry to monitor business growth and manage hotels. The ARR was ₹5,458.68 in FY 2020 compared to ₹5,671 in FY 2017. It is anticipated to increase at a compound annual growth rate (CAGR) of 2.49% between FY 2021 and FY 2025, reaching ₹6,292.85 by FY 2025. The RevPAR was ₹1,951.34 in FY 2020 and is predicted to increase to ₹3,336.28 in FY 2025.

Rising disposable income and a growing middle class have led to increased domestic travel within India. This has created a demand for hotels catering to various budgets and preferences. Additionally, the trend of weekend getaways and short vacations has gained popularity, driving the need for hotels in popular tourist destinations and proximity to major cities. The hotel industry in India is highly competitive, with both domestic and international hotel chains vying for market share. Established players as well as new entrants are continuously expanding their presence in the country. This competition has led to innovations in hotel concepts, designs, and guest experiences.