Making a global debut, ITC opens hotel in Colombo
Diversified conglomerate ITC, which inaugurated its first hotel outside India in Colombo on Thursday, says it is open to exploring opportunities across international markets to launch more hotels, mostly under management contracts.
The Kolkataheadquartered conglomerate will focus on “proximal markets” for expanding the hospitality business outside India. At home, it plans to launch around 70 hotels in the next five years.
“We will be open to exploring opportunities that come up. Because I think we have strong credentials in hospitality that we can take outside India now,” said ITC Chairman and Managing Director Sanjiv Puri.
$500-M INVESTMENT
Puri was talking to the media after the opening of ITC Ratnadipa, in Colombo on Thursday. Sri Lankan President Ranil Wickremesinghe inaugurated the hotel. The
Sanjiv Puri, CMD of ITC Ltd
company has invested around $500 million in the new property.
ITC’s wholly-owned subsidiary, WelcomHotels Lanka, launched the property with 352 rooms, suites and service apartments. The hotel aims to attract the MICE segment and tourists. The project,on a 5.86-acre sea-facing property, also has a residential apartment complex. The company will look to expand to more destinations in Sri Lanka.
On launching more hotels overseas, Puri said, “We will be more focussed on the proximal markets. Yes, we are open to it, if there are some interesting opportunities. We will certainly be interested to pursue that.”
Colombo’s new landmark, ITC Ratnadipa, has 352 rooms, suites and service apartments
Currently, the company is “exploring” the opportunity to enter the hospitality segment in Nepal through its subsidiary, Surya Nepal. The company is also open to launching hotels in West Asia.
ITC Hotels has more than 130 properties in over 80 destinations in India. In the last two years, it opened 22 hotels, largely under management contracts.
ASSET-LIGHT MODEL
“A few years back we moved
from an asset-heavy to an asset-right strategy, which means we not only have our own hotels, but are also managing properties. We will remain open to both. It is quite natural that management contracts in the future will be much larger than our own properties,” Puri said.
“We have a healthy pipeline of around 70 hotels in five years,” he said, adding that most of these will be upper-scale properties and under management contracts.
The company generally invests between ₹700 crore and ₹1,000 crore in renovation and new properties annually. It plans to launch its own property in Puri under the WelcomHotels brand.
SIX BRANDS
The conglomerate’s hotels business operates under six brands — ITC Hotel and Mementos in the luxury space; Storii in the premium segment; WelcomHotel in the upper to upper upscale segment; Fortune in the midscale segment, and WelcomHeritage in the heritage leisure space. On the progress of the proposed demerger of the hotel business, Puri said it is expected to be completed before the second half or the end of this year.
A meeting of shareholders will be convened on June 6 to approve the proposed scheme of arrangement amongst ITC Ltd and ITC Hotels Ltd and their respective shareholders and creditors for the proposed demerger.
The correspondent is in Colombo at the invitation of ITC Ltd.