Indian Hotels set to retain Vivanta brand
CHANGE OF STRATEGY Indian Hotels says it will retain its old structure and push for growth across segments, including midscale and economy hotels, reversing an earlier decision
Indian Hotels Co. Ltd (IHCL) on Friday said it would retain its old structure and push for growth across segments, including midscale and economy hotels, reversing an earlier decision to club all premium properties under the Taj luxury brand and exit sub-brands such as Vivanta.
“India is not a country where one size fits all... We cannot say we want to grow our margin and profit, and focus on just one brand,” said Puneet Chhatwal, managing director and chief executive of IHCL, at a media briefing.
“Themajority of the growthin the last 10 years and going forward in the domestic market is coming from midscale, upscale and the economy segment. So, we cannot be playing in isolation,” he said .
Chhatwal said the while companywill focus on three brands -Taj, Vivanta and Ginger -- it is still considering exiting some others such as Gateway and President.
IHCL’s previous CEO Rakesh Sarna had announced a new brand architecture for the company, seeking to club all premiumbrands, including Vivanta and Gateway under the Taj brand.
Both these brands have existed for almost a decade. Under the proposed initiative, Indian Hotels was looking to upgrade all 53 premium hotels of Vivanta and Gateway in India and abroad and migrating them into the Taj brand.
Chhatwal, whotookoverfrom Sarna in September 2017, said IHCL’s board members and management team had unanimously agreed to implement the new brand strategy.
“We must address diverse customer segments and price points... Just being in luxury and not segmented is not going to last. We want to also align our brandscape to dominate in high growth segments as well,” he said.
Chhatwal has chalked out a five-year plan which includes scaling up inventory by more than 50% and monetizing noncore assets to improve profitability margin by another 8 percentage points.
At present, the company has an EBIDTA (Earnings before interest, tax, depreciation and amortization) margin of 17% and expects to achieve 25% by 2022.
INDIAN HOTELS WAS LOOKING TO UPGRADE ALL PREMIUM HOTELS OF VIVANTA AND GATEWAY AND MIGRATE THEM INTO TAJ BRAND