Taj hotels aims to have 300 properties, with most of the new ones under the asset-light model in which it does not invest in land or construction but enters into a management contract
New Delhi, July 16, 2021: Taj Hotels, one of India’s biggest hotel chains, is aiming to expand its portfolio of properties by 36 percent to 300 in the next 3-5 years, a major chunk of which will come up under its asset-light strategy.
This expansion will add about 80 properties for the Tata Group-controlled Indian Hotels Company (IHCL) that currently has an inventory of 221 properties including 150 operational ones in India, 21 abroad and 50 in the pipeline.
Puneet Chhatwal, Managing Director and CEO, IHCL said, “If we could add 70 contracts during and pre-pandemic in three and half years, there is no reason why we can’t add another 80 in the next 3-5 years. So, our portfolio then becomes a portfolio of 300 hotels.” Chhatwal told inventors and analysts at the Investor Meet 2021 held a few days ago.
About 94 percent of IHCL’s properties in the pipeline are under the asset-light category, in which a company does not purchase land or the building but takes it on management contract and runs the hotel in exchange of management fees. Thus, the asset and its liabilities are on the books of the asset investor according to the reports published in moneycontrol.com.
By the end of next 3-5 years IHCL will have 46 percent of its properties under management contract, 36 percent held by group companies and 18 percent under holding company, according to a presentation made by IHCL.