Puneet Chhatwal, MD & CEO of IHCL, states that Q3 has traditionally been the strongest quarter for the sector and will continue to be so for Indian Hotels. He highlights the company’s achievement of surpassing Rs 1,500 crore in revenue, posting a 17% increase at the consolidated level. Most of their growth is driven by the asset-light, fee-based business model. He also mentions that at an enterprise level, the revenue growth exceeds 20%. Chhatwal expresses satisfaction with the company’s performance and mentions their investments in new businesses and marketing initiatives for Qmin and Ama.
Regarding the assessment of the past quarter, Chhatwal emphasizes the changing trend in the sector where the first half of the year, traditionally weak, is becoming stronger. He points out that Q3 and Q4 remain the strongest due to festivals and events like Diwali, Christmas, and New Year. Chhatwal expresses excitement about the performance and contribution of new businesses and the improvement in profitability for traditional businesses like Taj SATS and Ginger.
Chhatwal discusses the demand versus supply equation in the industry and the premium pricing of the Taj brand. He believes that demand will outpace supply in the near term due to limited construction during the pandemic. He mentions upcoming renovations and openings of Taj properties and expresses optimism about the future growth of the company.
Moving to the second half of the year, Chhatwal believes that events like the Cricket World Cup, Miss World pageant, and G20 will contribute to increased hotel demand. He also highlights the government’s infrastructure investments as a positive factor for the sector.
Chhatwal declines to make a forward-looking statement about rate increases in the second half of the year but agrees that an uptick of 14-15% or higher would be beneficial for the sector.
Regarding the decline in margins for the past quarter, Chhatwal attributes it to marketing and capital expenditures. He mentions the rebranding of all-day dining at Ginger properties to Qmin as an example of their strategic decisions.