More Indians are taking personal loans to travel and meet vacation-related expenses, according to Madhavan Menon, executive chairman of Thomas Cook India.
25.08.2023 - 13:43 / skift.com / Peden Doma Bhutia / Puneet Chhatwal
As demand outpaces supply in the Indian hotels market, the asset-light Indian Hotels Company (IHCL) reported its highest-ever full year consolidated revenue and a profit after tax of $122 million — a historic first for the company.
In 2019-2020, the company had reported a profit after tax of $750,000.
“The combined performance of the three best years for the company, which was 2006-2008 and 2017-2020, is less than the financial performance of 2022-2023,” said CEO and managing director Puneet Chhatwal at an earnings call on Friday.
Crediting the lease portfolio for providing the company with right operating leverage, the IHCL chief said the management fee business is helping drive margins in a very strong way.
“Our management fee businesses almost doubled in the last year to almost $49 million and this is only going up,” he said.
According to Chhatwal, Indian Hotels already has a balanced portfolio of owned/leased and managed hotels, and if hotels in development are taken into account, the company is already at a 50:50 ratio.
He hoped this balance would be maintained for operating hotels within the next 18 months. The ratio till last year was at 54:46.
The company has also started making “small moves” on the international expansion as its focus during the last five years had been in India.
“Our 250th hotel was in Saudi Arabia’s Riyadh and recently we signed the twin Taj and Vivanta in Dhaka, the capital city of Bangladesh,” said Chhatwal while adding that the company would be working on an asset-light basis, looking for more properties on operating lease or on management contracts.
“We do not engage in the acquisition of assets,” he said.
Speaking earlier to Skift, Chattwal had focused on the company’s asset-light growth driven through management contracts or operating leases.
Calling New York and San Francisco profitable pre Covid, Chhatwal said the UK and U.S. markets are still operating at 92 percent and the company expects in the next few months for these markets to either get to 2019-2020 level or exceed that.
“We have done very well in curtailing our losses in New York, which have reduced to a significant level. We have also reduced the cost of lease and renegotiated our agreement,” he said.
With Taj reaching 100 hotels, and the midscale brand Ginger Hotels getting close to 100, Chhatwal said Vivanta and SeleQtions together account for almost 78 hotels and very soon this number would also go up to 100.
According to Chhatwal, Ginger Hotels, which is a part of the company’s “lean luxe” offering, is a top priority for the company, as he considers it an ideal brand for India’s diverse landscape. “Ginger is also the fastest growing brand in terms of number of hotels,” he said.
In the last financial
More Indians are taking personal loans to travel and meet vacation-related expenses, according to Madhavan Menon, executive chairman of Thomas Cook India.
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