What IHCL's Latest Investment Reveals About Its Move Into Airport Hotels

28.10.2024 - 09:47 / skift.com / Peden Doma Bhutia / Puneet Chhatwal

Indian Hotels Company (IHCL), the parent brand behind Taj Hotels, is looking at airport properties as an important growth area. In its latest move, IHCL has invested INR 500 million ($6 million) into its subsidiary, Zarrenstar Hospitality, through a rights issue.

In March, IHCL had invested INR 350 million ($4.2 million) in Zarrenstar Hospitality.

With this IHCL will maintain complete ownership of Zarrenstar. “The funds will be used for developing a hotel near Cochin International Airport,” IHCL said in a stock exchange filing.

Set to open in November, the 112-room property under the Taj brand represents an estimated INR 1 billion ($12 million) investment aimed at capturing the airport’s high-traffic market.

“We are opening the Taj at Cochin International Airport in November this year,” Puneet Chhatwal, managing director and CEO of IHCL had said during the earnings call in July.

Zarrenstar recorded a turnover of INR 5.5 million ($65,416) as on March 31, 2024, according to the IHCL stock exchange filing.

In an earlier earnings call, Giridhar Sanjeevi, IHCL’s then chief financial officer called airport properties a very strong value proposition, adding that the company’s plans for Cochin Airport, Mumbai Airport and other locations would continue.

Besides Cohin’s Taj property, IHCL has a combo development of Vivanta and Ginger totaling 750 rooms at Bangalore Airport, it has also signed and announced a Ginger Mopa Airport in Goa with 300 rooms. In August, IHCL also unveiled its latest addition, Ginger Coimbatore Airport.

In November last year, IHCL opened the 371-Key Ginger Mumbai Airport hotel.  

“Ginger grew 45% year-on-year, enabled by the stellar performance of the flagship Ginger Mumbai Airport Hotel,” Chhatwal said while announcing the first quarter results for the period ending June 30, 2024.

London-based hotel group Yotel had also said that it’s looking to foray into the India market with hotels near some of the busiest Indian airports, CEO Hubert Viriot told Times of India earlier this year.

IHCL has grown its presence with a series of strategic expansions and the Zarrenstar Hospitality adds to this expanding portfolio. In the first quarter of fiscal 2025, IHCL signed 16 hotels and opened six new properties. With this the hotel company has surpassing the milestone of 325-plus hotels in its portfolio.

The group is also gearing up to launch the rebranded Gateway as a full-service hotel in the upscale and upper upscale segment. With a rollout of 15 hotels, IHCL has an ambitious goal to reach 100 Gateway hotels by 2030.

On Monday, IHCL also announced the opening of the 83-key Yarkay, Thimphu — IHCL SeleQtions in Bhutan.

Chhatwal said the Bhutan opening is designed to meet the growing demand for