TAJ HOTELS’ GCC AMBITIONS
HOW CAN ONE OF INDIA’S MOST WELL KNOWN HOSPITALITY CHAINS MAKE A BIGGER MARK IN THE REGION? MANAGING DIRECTOR AND CEO PUNEET CHHATWAL HAS A PLAN
CAN INDIA’S MOST IMPORTANT HOSPITALITY BRAND GET NOTICED IN THE GCC?
ALTHOUGH TAJ HOTELS RESORTS AND PALACES, a subsidiary of Indian Hotels Company Limited (IHCL), is among the best known hotel brands in South Asia, it has yet to make much of a mark in the Middle East. IHCL’s relatively new Managing Director and CEO, Puneet Chhatwal, however, is looking to change that.
Chhatwal, who joined IHCL in November of last year, is a well-known veteran of the hotel industry, with over three decades of experience in senior positions in hotel groups in Europe in North America. Prior to IHCL, the fluent German speaker was CEO and executive board member of Steigenberger Hotels AG – Deutsche Hospitality, and was also the Chief Development Officer of the Rezidor Hotel Group – Carlson Hotels Worldwide. Now, he tells CEO Middle East, he’s focused on ICHL’s “Aspiration 2022” expansion plans, which call for a 50 percent increase in the number of hotels in the company’s portfolio (in operation or in the pipeline) over the next five years. At the moment, the company operates 170 hotels in over 80 locations in 12 countries.
“Of that, we will have at least 30 percent more hotels in operation by 2022 than today. Eighty percent of that growth will be in the Indian subcontinent, and 20 percent outside,” he explains. “We will not ignore the rest of the world, but our focus will be on the Indian subcontinent, which for whatever reasons we ended up neglecting for almost a decade. We went into acquisitions in New York, in Cape Town, Sydney, San Francisco and other places. That’s good, but domestically we got a bit behind and we need to strengthen our position.”
The ultimate vision, he says, is for
IHCL to become the most iconic hotel company in South Asia. “At the same time, we want to be the most profitable. Profitable growth is the mantra going forward. We want to grow our margin by 8 percent, and we feel 50 percent of that growth in the margins will come from the new projects we are doing,” he says.
The Middle East plays an important role in the company’s expansion plans outside of the subcontinent,” he says, adding, “We would like to be in all the key destinations, like Muscat, Wadi Rum, Amman, Abu Dhabi and all the emirates of the UAE,” he says. “We’d also like to do a couple of resorts in the Middle East… we need to [expand], and in the longer term destinations such as Istanbul could be important.”
MULTIPLY IN DUBAI
There is currently only one Taj hotel In Dubai, on Burj Khalifa Street in Business Bay. This will soon change, however, with the opening of a new Taj in the emirate’s Jumeirah Lake Towers, which Chhatwal has said will likely see a soft opening by the end of this year. The five-star Taj Hotel extends from the ground floor to the 17th floor and features 200 guest rooms and suites, in addition to recreational facilities and dining venues.
“In an ideal world, it will open before the end of the year so we can benefit from the Christmas and New Year period, which is very strong in Dubai… but hopefully it can happen anytime between the 15th of December and the 15th of February.”
Chhatwal is also optimistic that a second hotel – the Taj Exotica Resort & Spa on the Palm Jumeirah – will be likely to open in October of 2019. “That would be great if we can achieve that,” he notes. “There is a lot of supply that is coming to the Dubai market, so the timing of the opening is maybe more important than it has ever been before.”
In late September, a deal for a fourth hotel – a Taj in Dubai’s Deira Creek – was announced. The new hotel – which will be located 15 minutes from Dubai International Airport – is slated to open in early 2022 as part of the Deira Waterfront Development.
IHCL’s efforts in Dubai are not without their challenges. The main one, Chhatwal explains, is differentiating oneself from the competition. “This is very difficult. Every month somebody opens something with some new innovation. That’s needed to stay ahead of the competition,” he says. “But a differentiator is not just the product. It’s also the service. [In IHCL’s case] it’s this whole feature of Indian hospitality. I think Asian brands are more apt at achieving that. Second is the source of business. We think that for Dubai, for Bollywood, for business, there is a lot of traffic coming from our home turf… we are well equipped for the future.”
Chhatwal downplays concerns about
“WE WILL NOT IGNORE THE REST OF THE WORLD, BUT OUR FOCUS WILL BE ON THE INDIAN SUBCONTINENT, WHICH FOR WHATEVER REASONS WE ENDED UP NEGLECTING FOR ALMOST A DECADE”
an oversupply in Dubai’s hospitality sector, saying that a strong focus on “micro-markets” such as JLT – which he says are most decidedly not oversupplied – higher demand and the rapidly approaching Expo 2020 Dubai leave IHCL with cause to benefit.
SAUDI ARABIA’S NEXT
Chhatwal is quick to note that ICHL is keeping a watchful eye on Saudi Arabia, where in April the company announced its first foray into the kingdom – in Makkah – through a partnership with Umm Al Qura Development and Construction Company. As part of the agreement, IHCL is currently developing a property in the city’s King Abdul Aziz Road (KAAR) rejuvenation project. The hotel – which is scheduled to open in January 2023 with approximately 340 keys, banqueting facilities and several restaurants – is situated within walking distance of the Grand Mosque and well placed to serve the millions of pilgrims that visit the city ever year.
Although Chhatwal notes that Makkah is “logical” in terms of where IHCL plans to expand in the kingdom, he already is thinking of opportunities to spread to other Saudi cities.
“There are a couple of markets [in Saudi Arabia] that are important for any brand,” he says. “One is obviously Riyadh, and a second one is Jeddah. Al Khobar is also important. There are many such markets. Saudi has a lot of cities which are important destinations… in an ideal world, we would like to see ourselves present in this order. Either Riyadh then Jeddah, or Jeddah then Riyadh, and the rest can come later. Now that we’re in Makkah, if we can also get Madinah, that would be good.”
One market phenomenon Chhatwal isn’t too worried about are mid-market hotels in Dubai and across the wider UAE. While he welcomes the recent increase in demand for their variety, he is going to stay away from leading IHCL into that particular segment any time soon.
“As and when opportunities come along, maybe. I think once we are well settled with the Taj brand, the rest will automatically follow, just like it has happened with other brands, with their luxury brand being established first,” he says. “But for us, Vivanta for example is not mid-market. It’s an upscale brand, and I think we are better off doing that.”
“WE’D ALSO LIKE TO DO A COUPLE OF RESORTS IN THE MIDDLE EAST… WE NEED TO [EXPAND], AND IN THE LONGER TERM DESTINATIONS SUCH AS ISTANBUL COULD BE IMPORTANT”
Grand The Taj Bengal is an iconic landmark in the City of Joy, 3.2 km from Kolkata’s business district
Prime location Taj Hotel Dubai’s 296 lavish rooms are a mix of rich Indian artistry and traditional influences
Nature calls The Taj Exotica Resort & Spa, Maldives is spread across the Emboodhu Finolhu island