There is a lot going on suddenly at the Indian Hotels Company (IHCL) that runs the Taj group of hotels. A couple of years ago, the hotel chain appeared to be a floundering company as it abandoned its segmented brand approach for a concept called Tajness, and seemed to be losing its grip on the market.

Puneet Chhatwal, who took over as Managing Director and CEO of IHCL at this difficult juncture, has ushered in a host of changes that include a new brand architecture, aggressively focussing on development (22 hotels signed in 2018-19) and an infusion of funds for expansion. While he has junked the mono-brand approach of his predecessor and restored some of the earlier segmentations, the brand Gateway is being killed. A new brand, SeleQtions, has been created. Will these moves help the Taj regain its standing as the crown jewel in Tata group’s portfolio? Excerpts from an interview with Chhatwal:

IHCL has gone through a period of changing and re-changing its brand strategy. What is the current brand architecture? What about Tajness? Is it going to remain as well?

To achieve sustainable growth and profitability, one needs to look at scaling and this will mean we need to constantly keep an eye on the market dynamics and adapt our branding approach to suit diverse, high-growth and relevant market segments.

Part of our five-year plan, Aspiration 2022, was to reimagine our brandscape and today we have very distinct brands with their own value proposition suiting different customer needs. The new brandscape has Taj, SeleQtions, Vivanta and Ginger. Taj is the iconic brand in the luxury space. Vivanta is our collection of upscale hotels and resorts catering to smart travellers seeking unique experiences. A new brand, SeleQtions, was rolled out on April 11, 2019. Ginger was repositioned in the lean -luxe segment. Tajness remains integral to our brand promise as it is the soul of the company.

Can you share the idea behind the two new brands, SeleQtions and Expressions?

SeleQtions is a collection of named and distinctive properties. We believe the brand has great potential to grow. It was launched with 12 hotels across the country. The vision for the brand is to celebrate individuality, by offering unique experiences through landmark hotels that have their own legacy and charm.

SeleQtions will allow IHCL to cater to a broader audience of travellers who prefer staying in hotels with a distinctive character. SeleQtions also includes hotels that have a slice of history, defining location, or a differentiated theme.

Expressions will include all the service retail brands like Chambers, our signature F&B outlets like Golden Dragon, Wasabi, House of Ming, Thai Pavilion, etc, Khazana — the lifestyle retail brand, Jiva — our spa brand and the salons, with the view to unlock the equity of these brands.

Which are the properties being migrated into SeleQtions? Will the creation of these brands mean you could sign more properties?

The 12 hotels in the first phase include properties present in seven key lodging markets of India: President, Mumbai; Ambassador, New Delhi; The Connaught, New Delhi; Blue Diamond, Pune; Cidade de Goa; Tajview, Agra and Devi Ratn, Jaipur. The others are Pratap Mahal Ajmer; Savoy, Ooty; Gateway Coonoor; Gateway Chikmagalur and Gateway Varkala.

You are absolutely right. Creation of these brands means we can sign many more properties. We have already been signing hotels under these new brands.

We are now in year two of your five-year strategy to spur growth. How is the 3R (Restructuring, Re-engineering and Re-imagining) strategy going?

2018 has been a year of clocking milestones and turning around in terms of profitability. We also started scaling and expanding across markets, bringing Aspiration 2022, to life. We signed 22 new hotels for 2018-2019 and opened five hotels.

We won the Taj Mansingh bid and signed a lease with NDMC for 33 years. The major rebranding of Ginger and repositioning it in the lean-luxe segment has been very successful.

We entered the homestay market with Ama Trails and Stays. We launched SeleQtions with 12 hotels.

We took over Cidade De Goa and this further consolidates our position of strength in Goa. We have been renovating and upgrading our hotels to stay relevant for the discerning and evolving traveller. We migrated 19 hotels to the Taj Brand this year.

The last one year has seen a serious attempt to reduce debt. How are you rationalising assets?

We have reduced debt considerably and the net debt to EBITDA has come down, from over 4.74 in 2017 to 2.11 this fiscal. Our aim is to monetise non-core assets. We recently sold our hotels in Visakhapatnam and Thiruvananthapuram. We have several land banks and houses that will also be monetised. We have an asset management team in place that is constantly evaluating each of the assets to ensure we optimise enterprise value.

Ginger has seen repeated makeovers. Although IHCL was among the first to enter the budget category, it has not achieved desired scale. Why?

When we launched Ginger in 2004, it was a revolutionary concept where we offered guests smart basic rooms at a very competitive price with the assured safety and trust that comes with its brand promise.

Customer trends and needs change over time. Hence we needed to revisit the brand now.

The Indian consumer has evolved and, with the rising middle-class incomes, is now more aspirational. We thus reimagined the brand and repositioned it in the lean-luxe segment. The new Ginger energises the hospitality experience that combines work and play, providing a relaxed place to live, work and socialise with like-minded people while getting wired into the city.

Related Topics
comment COMMENT NOW