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

CEO Middle East - - CONTENTS - BY BERND DEBUSMANN JR

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.”

MID-MAR­KET HO­TELS

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

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