HBI Staff | Hyderabad 
Puneet Chhatwal, Managing Director & CEO of Indian Hotels Company Limited (IHCL), has emphasized the need for infrastructure sector status for the hospitality industry to secure better financing options. Chhatwal highlights that many regulatory caps placed more than a decade ago must be removed to align with the government’s infrastructure development strategy. He stated, “Supporting this sector isn’t about luxury; it’s about enabling a diverse workforce operating 24/7 and creating jobs.”
While discussing the sector’s current growth phase, Chhatwal stated that the industry’s “honeymoon period” isn’t over yet. “The change in business models, balancing capital-heavy and capital-light initiatives, has helped us perform and outperform,” he said. IHCL’s approach of combining owned assets with asset-light businesses ensures profitability while hedging against potential headwinds.
Chhatwal reiterated that Taj Hotels remains India’s hospitality icon. “Taj will always be our crown jewel. However, the surrounding businesses are helping drive premiumisation and profitability,” he explained. IHCL’s strategic focus on international markets includes expanding Taj’s presence in regions like Bhutan, Bahrain, Saudi Arabia, and Frankfurt, all through management contracts.
Chhatwal projected significant growth in India’s hotel industry, estimating that branded room capacity will increase 2.5 times over the next five to seven years. He stressed the urgent need for expansion to address India’s current lag in hotel rooms compared to its population and global standing.
Responding to concerns over a slowdown in Goa’s tourism market, Chhatwal stated that IHCL properties in Goa have maintained a strong performance. Renovation efforts at key properties like Fort Aguada and Holiday Village, though causing short-term disruptions, are set to boost revenue potential in the future.
IHCL reported robust performance in the last quarter, with standalone margins seeing year-on-year growth. Chhatwal credited high occupancy levels and the ability to command premium rates at iconic properties like the Taj Mahal Palace in Mumbai and Rambagh Palace in Jaipur. “India is still undercharging compared to global standards, given the quality of service and iconic properties,” he noted.
Calling for a renewed campaign to attract foreign tourists, Chhatwal proposed a modernized version of the “Incredible India” initiative. He emphasized India’s untapped potential in tourism, given its vast coastline, mountain ranges, and rich cultural heritage. “India must increase its share of global tourism through strategic marketing and government support,” he said.
IHCL, with no net debt and a robust cash reserve of ₹2,800 crore, is poised for inorganic growth opportunities within India. Chhatwal also revealed plans to carefully expand Taj’s global footprint in key markets like Southeast Asia while focusing on asset-light models.
Hospitality Industry Seeks Tax Reforms
Chhatwal highlighted the industry’s labor-intensive nature and relatively low wages, stressing the need for rationalized taxation. “Taxing the sector at the highest level isn’t sustainable for its growth,” he said. Additionally, he urged states that haven’t yet granted industry status to hospitality to do so, citing its importance for tourism development.
With 11 consecutive quarters of record-breaking performance, Chhatwal is optimistic about the company’s ability to navigate future challenges. “Life won’t always be a straight upward trajectory, but IHCL is better positioned than ever to face any headwinds,” he concluded.
Source: ET
