The Indian Hotels Company (IHCL), controlled by the Tata Group, plans to expand its hotel inventory significantly by investing ₹5,000 crore over the next 5 years. This is in response to the booming tourism sector in India.
Indian Hotels currently hold 12-13% of the branded hotel room market in India, and this share is expected to grow to 23% by 2030. With 350 hotels in its portfolio today, the company aims to increase its total to 700 hotels, with 500 operational by the end of FY30. This expansion will raise the total number of rooms to 70,000, up from 42,500. The company’s revenue is also expected to double, growing from ₹7,000 crore to ₹15,000 crore by FY30.
IHCL is considering new hotel brands, including possibilities for branded residences, extended stays, and even an all-inclusive brand, which is uncommon in India but popular abroad. Puneet Chhatwal, the company’s managing director and CEO, mentioned that the exact timing and details of these new brands have yet to be decided.
In addition to organic growth, IHCL is open to inorganic growth through M&As (mergers and acquisitions) as it continues to generate enough cash for expansion.
Asset-Light Model and International Growth
The company also plans to increase the number of hotels operating under an asset-light model, where IHCL does not own the property but works with development partners. By 2030, the share of asset-light properties is expected to rise to 70%, compared to 37% in 2018.
While most of IHCL’s new properties will be located in India and nearby markets, the company is also targeting international locations such as Dubai, Bahrain, Saudi Arabia, Singapore, Thailand, the UK, and Germany. However, its international expansion will be limited, with plans for just 2-3 hotels per year.
Hotel Market Growth in India
India’s hotel market is still underdeveloped, with only 200,000 branded hotel rooms, which is just 4% of the US market. The sector is expected to grow at a rate of 6-8% annually, though demand is expected to increase at a faster pace.
Stock Market Reaction
On November 21, 2024, Indian Hotels share price opened at ₹760.00, touching the day’s high at ₹774.20 as of 10:44 AM on NSE.
Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.
We're Live on WhatsApp! Join our channel for market insights & updates
Enjoy ₹0 Account Opening Charges
Join our 2 Cr+ happy customers