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IHCL expects a 50 per cent higher potential from management fees. It has updated its potential from Rs 400 crore to Rs 600 crore. The company aims to have 50 per cent of its properties under management contracts to go asset light by 2025.
Under its 2025 Ahvaan goal, the company has said it aims to maintain a 50:50 portfolio for owned/leased versus managed hotels. It had targeted a potential revenue generation of over ₹400 crore, according to a recent report, the company has updated this target to ₹600 crore.
The company has seen a growth of 17 per cent increase in H1 y-o-y in FY24.
During the post earnings call, Puneet Chhatwal, the Managing Director and Chief Executive Officer of Indian Hotels Co. Lth said, “We have 80 contracts in the pipeline. If you take out 5 or 6 that are owned and maybe another 5 that might be leased, the rest is all management. So, the management fee income will keep growing.”
Recently, in an interview to this paper, Chhatwal said the company would have a ratio of 50:50 between owned and managed properties under its portfolio by FY26.
The Tata-owned company has seen a multifold increase in income from management fees. In FY18, the company generated ₹204 crore from management fees. This grew marginally, by ₹9 crore to ₹213 crore in FY19, and stayed flat in FY20 due to the covid period. In FY23 however, its management fees almost doubled to ₹399 crore.
Traditionally, the Tata-owned hospitality firm has owned a chunk of its properties. However, it has made significant efforts to go asset light over the past several fiscals.
According to the company, as of September 30, 2023, under the owned + leased category, the company has 110 hotels with 13,093 rooms, and 26 hotels with 2,908 in the pipeline. On the other hand, under the management contracts category, it has 82 hotels with 9,372 rooms operational, and 56 hotels with 8,154 rooms in its pipeline.
In H2FY 24, the company’s pipeline inventory includes 375 rooms under Taj, 450 rooms under SelQtions, 174 under Vivanta and 134 rooms under Ginger. The company has said for FY25, this number will go up to 442 rooms for Taj, 741 for SeleQtions, 848 for Vivanta and 325 for Ginger.
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