The Hindu Business Line : Indian Hotels bullish on growth

INDIAN Hotels Company Ltd (IHCL) will be a major beneficiary of the growth in global tourism pegged around six per cent over the next 10 years, Mr Ratan Tata, Chairman of the company, said.

India and China, according to Mr Tata, will be major destinations for tourism. However, the Government needs to look at the tax structure and infrastructure for this industry. "We hope the Government will give due attention,'' Mr Tata told shareholders at the company's 103rd annual general meeting.

Mr Tata expressed confidence that the company will consolidate its position as one of the leading world standard hotels. "India is the fastest growing destinations in this part of the world and this is driven by the growth in the economy,'' he said. During the 2003/2004 fiscal, international travel has increased by 18 per cent with 2.9 million visitors entering India. Domestic travel has grown by 15 per cent.

"We will expand our entry into the lower-end hotel segment through the IndiOne hotel range to a large number of destinations. The mid-level market in the hotel sector is huge,'' Mr Tata said.

IndiOne, he said, was launched to cater to a large mass of young people seeking facilities at lower rates. The company had earlier announced that it plans to roll out around 1,500 IndiOne rooms in various cities over the next 12 months and 55-60 such hotels over a five-year period.

These properties would offer more facilities than three or four-star properties, but would cut down on frills. The rooms, which would come with ISD and direct dialling facilities, offered good value at an average room rent of Rs 950, he said.

During the current fiscal, the company plans to open its service apartments, Taj Wellington Mews. During this fiscal, two new luxury resorts are being set up, one each in Mauritius and Kovalam, Thiruvananthapuram.

The company expects to incur a capex of Rs 167 crore during this fiscal, Mr Tata said.

The profit on account of sale of properties (Sahar and Chiplun) stood at Rs 27 crore in the previous year, he said.

The company has commissioned the US-based Landor Associates to work on the branding of the hotel company; the agency is expected to submit its report by the year-end. Besides, an agency has been employed to market the retail space in their luxury properties.

He ruled out the company's entry into the airline sector at this point. The impact of turnover tax would not be significant, he said.

While the promoters hold 35 per cent stake in IHCL, FIs (13.84 per cent) and insurance companies (7.75 per cent) together hold a 21.5 per cent, he said.