Description
It describes about Industry Trends of hospitality industry, PEST Analysis of hospitality Industry, Competitor Analysis of Indian Hotels, SWOT analysis, Company Description, General Information about the company, it's Finance performance, SWOT analysis of Indian Hotels and Various Strategies employed by Indian Hotels.
Indian Hotels Company Limited- Company Analysis
Industry Analysis
Hotel/ Hospitality Industry in India: "Athithi devo bhavha" is been one of central idea of tourism in Indian culture. In India, the guest is treated with utmost warmth and respect. Today hotel industry is one of the fastest growing sectors in India. It is expected to grow at the rate of 8% till 2016. Many international hotels including Sheraton, Hyatt, Radisson, Meridian, Four Seasons Regent, and Marriott International are already established in the Indian markets and are still expanding. Hotels in India' have supply of 140,000 rooms. According to the tourism ministry, industry is expected to increase to US$375.5 billion by 2018 at a 9.4% annual growth rate. 'Hotels in India' has a shortage of 150,000 rooms fuelling hotel room rates across India. With tremendous pull of opportunity, India is a destination for hotel chains looking for growth. The World Travel and Tourism Council, India, data says, India ranks 18th in business travel and will be among the top 5 in this decade. Sources estimate, demand is going to exceed supply by at least 100% over the next 2 years. Five-star hotels in metro cities allot same room, more than once a day to different guests, receiving almost 24-hour rates from both guests against 68 hours usage. With demand-supply disparity, 'Hotel India' room rates are most likely to rise 25% annually and occupancy to rise by 80%, over the next two years. 'Hotel Industry in India' is eroding its competitiveness as a cost effective destination. However, the rating on the 'Indian Hotels' is bullish. 'India Hotel Industry' is adding about 60,000 quality rooms, currently in different stages of planning and development and should be ready by 2012. MNC Hotel Industry giants are flocking India and forging Joint Ventures to earn their share of pie in the race. Government has approved 300 hotel projects, nearly half of which are in the luxury range. With the US $100 billion software services sector pushing the Indian economy skywards, more and more IT professionals are flocking to Indian metro cities. 'Hotel Industry in India' is set to grow at double digits a year. More than 50 international budget hotel chains are moving into India to stake their turf. Therefore, with opportunities galore the future 'Scenario of Indian Hotel Industry' looks rosy. Classification of Hotels in India:
?
Based on Location: o Airport Hotels o Suburban hotels o City centre o Motels o Resorts
?
Based on Level of Service: o Economy/Budget Hotels o Mid range Hotels o Luxury hotels ? Based on Target Market: o Commercial Hotels o Convention Hotels o Suite Hotels o Casino Hotels
?
Based on Themes: o Heritage o Boutique/Spa o Ecotels
Top Players in Hotel Industry:
? ? ? ? ? ?
ITC Hotels Indian Hotels Company Ltd.(The Taj Hotels Resorts & Palaces) Oberoi Hotels(East India Hotels) Hotel Leela Venture Asian Hotels Ltd. Radisson hotels & Resorts
PEST Analysis of Hotel/Hospitality Industry:
?
Political Factors:
o o o o
100% Foreign Direct Investment is allowed in India for Hospitality industry. After recent security violating incidences Government have tight norms to increase the security level. Tourism is promoted by Government on very large scale. To hire a technical executive from country other than India no permission from Government is required.
?
Economic Factors:
o o o o o
High Growth is expected in Tourism industry. More immerging markets available for business - Africa, APAC & Middle East Infrastructure is not on par with Global Industry levels. Recent economic Slowdown can effect Tourism and hence Hospitality. High Inflation and Exchange rate are points against for the industry.
?
Social Factors:
o o o ?
With increasing disposable income financial power has increased. Due to more exposure to global environment life styles are changing. 40 per cent of the total population is from Urban middle class.
Technical Factors: o Computerization provides better and real-time status of inventory o Hotels offering LCD TVs, Wireless Web Connectivity & Conference facilities.
SWOT Analysis of Hotel Industry:
?
Strengths: o India’s rich culture heritage: India, with more than 3000 years of history is one big package of culture which rises expectation of a visitor. With presence of Himalayas, the vast Indo Gangetic Plains, lush tropical jungles and a long coastline, a visit to the country is a changing spectacle of religions, customs and festivals. o Demand–supply gap: There is a mismatch between the demand and supply of rooms in India at the moment. With little over a lakhs of rooms in the country, the size of the hotel industry is tiny compared to India's size and growth prospects. Demand will outpace supply in the short to medium term despite new capacities are expected to be added.
o
Government support: A few years ago, the Indian government had totally neglected tourism, at an extent that no funds were allocated for tourism. However, government have realized the importance of tourism and ‘Incredible India’ campaign is an outcome of this. In addition to this, infrastructures, modernisation of airports, open sky policy are some of the other initiatives.
?
Weakness: o Poor support infrastructure: India is allocating miniscule amount on infrastructure. In comparison to China, who spends ~10% of its GDP on Infrastructures like Roads, Airports, compared to just ~4.5% of GDP of India. Opportunities: o Rising Income: Domestic Tourism has witnessed a growth of more than 30%. As per capita income has grown by more than 6%, the present-day has witnessed consumption boom in India. This is a strong opportunity, as spending is likely to sustain for a longer period. Higher disposable incomes are also expected to enhance the concept of travelling for leisure.
o
?
Open sky benefits: The opening up of the aviation industry in India has brought vital opportunities for the hotel industry. Increased competition
among airline companies will lead to the development of new and improved services.
o
New business opportunities: The commercial zones which are being developed in metro suburbs and secondary markets will invite surge in accommodation demand. This provides a unique opportunity for hospitality projects. Also the new concept, which is going to gain importance, is that of budget hotels. Due to their inherent nature of operation, costs involved and flexibility, budget hotels will be better suited to withstand the next economic downturn.
?
Threats: o Event risk: Dependency on foreign tourism can be dangerous as travel decisions are based on global patterns and on events that happen elsewhere. Events like terrorist attacks, serial bomb blasts have severely impacted the tourism industry and the threat remains. o Increasing competition: Global hospitality majors like the Four Seasons, Shangri-La and Aman Resorts are making their entry into the Indian market. The Hilton Group is deciding on a comeback and has tied up with the Oberoi Group. The Carlson Group and the Marriott chain are furiously looking for new hotels in India cities. This will increase the competition for the existing Indian hotel majors.
Company Analysis
Company Description: Incorporated, in 1903, by Jamshed N. Tata of the Tata group, Indian Hotels Company Limited (IHCL) is India’s largest hospitality company. IHCL and its subsidiaries are collectively known as the ‘Taj Hotels, Resorts and Palaces’. Taj Hotels Resort and Palaces own and operate 93 hotels, 7 palaces, serviced apartments, 6 private islands and 12 resorts and spas, spanning 55 destinations in India and 16 countries across 5 continents and employ over 13000 people. Besides India, Taj Hotels Resort and Palaces are located in the United States of America, England, Africa, the UAE, Maldives, Malaysia, Bhutan, Sri Lanka and Australia. The company proposes to increase its inventory to ~15,843 rooms across 130 hotels by the end of 2012-13. With the promoter group holding 33.6% stake in the company, IHCL is listed on the BSE and NSE. The Taj Hotels Resorts and Palaces is grouped into four distinct business segments Luxury, Upper Upscale, Upscale and economy/budget categories to provide consistency across the different hotels and standardise offerings. Of these, the luxury properties in metro and key leisure destinations are largely in the books of IHCL while the rest are held through subsidiaries and associates. The Group also operates a number of properties on pure management contracts. More details on operation of IHCL with different value segments of market are as stated next.
Taj (luxury full-service hotels, resorts and palaces) is flagship brand for IHCL. Spanning world-renowned landmarks, modern business hotels, idyllic beach resorts, authentic Rajput palaces and rustic safari lodges, each Taj hotel reinterprets the tradition of hospitality in a refreshingly modern way. Taj Exotica is resort and spa brand found in the most exotic and relaxing locales of the world. They are cantered around high end accommodation, intimacy and an environment that allows its guest unrivalled comfort and privacy. Taj Safaris are wildlife lodges that allow travellers to experience the unparalleled beauty of the Indian jungle amidst luxurious surroundings. Taj Safaris provide guests with the ultimate, interpretive, wild life experience. Vivanta by Taj Hotels & Resorts span options for the work-hard-play-hard traveller across metropolitan cities. The Gateway Hotel (upscale/mid-market full service hotels and resorts) is a pan-India network of hotels and resorts that offers business and leisure travellers a hotel designed, keeping the modern nomad in mind. Ginger (economy hotels) is IHCL's revolutionary concept in hospitality for the value segment. Intelligently designed facilities, consistency and affordability are hallmarks of this brand targeted at travellers who value simplicity and self-service. IHCL operates Taj Air, a luxury private jet operation with state-of-the-art Falcon 2000 aircrafts designed by Dassault Aviation, France; and Taj Yachts, two 3 bedroom luxury yachts which can be used by guests in Mumbai and Kochi, in Kerala. IHCL also operates Taj Sats Air Catering Ltd., the largest airline catering service in South Asia, as a joint venture with Singapore Airport Terminal Services, a subsidiary of Singapore Airlines.
General Information about IHCL: Headquarters: Taj Hotels Resorts and Palaces, Oxford House, 15/17 N.F. Road, Apollo Bunder, Mumbai 400 001, India
Year of Founding: April, 1903 Number of Employees: 13,000+
Top Management: Top Management of IHCL is tabulated in following table. Name Abhijit Mukerji Anil P Goel Beejal Desai Beejal Desai Deepa Misra Harris Deepak Parekh H N Shrinivas Jagdish Capoor Jyoti Narang K B Dadiseth Mehernosh S Kapadia Nadir Godrej P K Mohankumar R K Krishna Kumar Ratan N Tata Raymond N Bickson Raymond N Bickson Shapoor Mistry Veer Vijay Singh Yannick Poupon Designation Executive Director Executive Director Vice President - Legal & Company Secretary Secretary Sr. Vice President - Sales & Marketing Director Sr. Vice President - Human Resources Director Chief Operating Officer - Luxury Hotels (India) Director Executive Director Director Chief Operating Officer - Gateway Hotels Vice Chairman Chairman / Chair Person CEO Managing Director Director Chief Operating Officer-Vivanta Hotels Chief Operating Officer - Luxury Hotels
Shareholding pattern: Shareholding pattern for IHCL is as follows. Shareholding pattern - Indian Hotels Company Ltd. % No of Holder's Name Share Shares Holding Promoters 303066116 37.53% Financial 166122755 20.57% Institutions
General Public Foreign Institutions Other Companies Banks Mutual Funds Others Foreign Industries Directors Central Govt
161615594 100934945 45544470 12365969 11482277 5575426 433755 43400
20.01% 12.50% 5.64% 1.53% 1.42% 0.69% 0.05% 0.01%
Financial Performance of the Company: Capital Structure of IHCL is as per following table. Capital Structure - Indian Hotels Company Ltd. Authorized Issued Instrument -PAIDUPCapital Capital To 2012 Equity Share (Rs. cr) 100 (Rs. cr) 75.9 Shares (nos) 759472787 Face Value 1 Capital (Rs. Cr) 75.9
Period From 2011
Revenue Growth – At the standalone level, IHCL reported a 7% y-o-y growth in revenues in Q3, 2011-12 driven by a combination of increase in inventory across key markets, such as the newly re-launched heritage wing in Taj Mahal Mumbai and the Falaknuma Palace in Hyderabad, and moderate RevPAR growth in a few markets. While Bangalore, Kolkata and Jaipur reported increase in occupancies, markets such as North Mumbai, Bangalore, Hyderabad and Goa reported ARR growth. Overall Goa, Jaipur and Bangalore remained the best performing markets during the 9M, 2011-12. However on the whole, for a seasonal peak, the ARR/Occupancy growth across a majority of the markets remained fairly muted owing to the uncertain economic environment. Further the performance of key markets for the company such as NCR and Chennai has been impacted by new supply. Profitability – Despite the revenue growth, the company (standalone) reported a 2.4% decline in operating profits owing to one-time expenses related to opening of the Vivanta at Bangalore and higher employee costs. Further the company reported extraordinary forex losses and under-recovery on insurance claims for the 26/11 attacks on Taj Mahal Mumbai leading to stagnant profits after tax (PAT). The company’s consolidated performance is likely to be further impacted by the muted performance of its overseas properties. Capex – IHCL’s capital commitments over the near term remain limited with only two ongoing projects (Dwarka and Guwahati), both of which would be funded with internal accruals. The company does not propose to raise any further debt over the next 18 months. However the group continues to rapidly expand its portfolio through management contracts and new projects in associates/JVs.
SWOT Analysis of IHCL:
?
Strengths: o Brand Value: With one of the most loyal brand name from Tata, IHCL enjoys a great brand value. o Infrastructure and Best in class services: IHCL has some of the world class infrastructures coupled with best service in country in its class. o Sales and Marketing network: Strong Sales and Marketing network is one key stretch in growth of IHCL. o Strategic Expansion Weakness: o Dependency majorly on Indian Territory: IHCL has its major chunk of business in Indian Territory. Dependency on single geographical territory limits new opportunities.
o
?
Dependency only high end Luxury Segment: Same as territory IHCL has its most business in High and Luxury segment. Again dependency on single segment is dangerous, more diversification is required.
?
Opportunities o Rapidly growing market in India, South Asia and key gateway cities in sourcemarket destinations can be a very good opportunity to diversify its operations and range. o Expansion in international destinations o Growing demand in the budget and mid-market segments. o Extending the product portfolio in luxury residences, wildlife lodges and spas. o Favourable Market Dynamics o Focus on Meetings, Conferences, Exhibitions, Eco-tels/Budget Hotels o Lobbying for improved Infrastructure status Threats: o High Competition o General downturn in global economies o Interest rates fluctuation o Cheaper international airfares o Growing presence of international hospitality chains
?
doc_530979117.docx
It describes about Industry Trends of hospitality industry, PEST Analysis of hospitality Industry, Competitor Analysis of Indian Hotels, SWOT analysis, Company Description, General Information about the company, it's Finance performance, SWOT analysis of Indian Hotels and Various Strategies employed by Indian Hotels.
Indian Hotels Company Limited- Company Analysis
Industry Analysis
Hotel/ Hospitality Industry in India: "Athithi devo bhavha" is been one of central idea of tourism in Indian culture. In India, the guest is treated with utmost warmth and respect. Today hotel industry is one of the fastest growing sectors in India. It is expected to grow at the rate of 8% till 2016. Many international hotels including Sheraton, Hyatt, Radisson, Meridian, Four Seasons Regent, and Marriott International are already established in the Indian markets and are still expanding. Hotels in India' have supply of 140,000 rooms. According to the tourism ministry, industry is expected to increase to US$375.5 billion by 2018 at a 9.4% annual growth rate. 'Hotels in India' has a shortage of 150,000 rooms fuelling hotel room rates across India. With tremendous pull of opportunity, India is a destination for hotel chains looking for growth. The World Travel and Tourism Council, India, data says, India ranks 18th in business travel and will be among the top 5 in this decade. Sources estimate, demand is going to exceed supply by at least 100% over the next 2 years. Five-star hotels in metro cities allot same room, more than once a day to different guests, receiving almost 24-hour rates from both guests against 68 hours usage. With demand-supply disparity, 'Hotel India' room rates are most likely to rise 25% annually and occupancy to rise by 80%, over the next two years. 'Hotel Industry in India' is eroding its competitiveness as a cost effective destination. However, the rating on the 'Indian Hotels' is bullish. 'India Hotel Industry' is adding about 60,000 quality rooms, currently in different stages of planning and development and should be ready by 2012. MNC Hotel Industry giants are flocking India and forging Joint Ventures to earn their share of pie in the race. Government has approved 300 hotel projects, nearly half of which are in the luxury range. With the US $100 billion software services sector pushing the Indian economy skywards, more and more IT professionals are flocking to Indian metro cities. 'Hotel Industry in India' is set to grow at double digits a year. More than 50 international budget hotel chains are moving into India to stake their turf. Therefore, with opportunities galore the future 'Scenario of Indian Hotel Industry' looks rosy. Classification of Hotels in India:
?
Based on Location: o Airport Hotels o Suburban hotels o City centre o Motels o Resorts
?
Based on Level of Service: o Economy/Budget Hotels o Mid range Hotels o Luxury hotels ? Based on Target Market: o Commercial Hotels o Convention Hotels o Suite Hotels o Casino Hotels
?
Based on Themes: o Heritage o Boutique/Spa o Ecotels
Top Players in Hotel Industry:
? ? ? ? ? ?
ITC Hotels Indian Hotels Company Ltd.(The Taj Hotels Resorts & Palaces) Oberoi Hotels(East India Hotels) Hotel Leela Venture Asian Hotels Ltd. Radisson hotels & Resorts
PEST Analysis of Hotel/Hospitality Industry:
?
Political Factors:
o o o o
100% Foreign Direct Investment is allowed in India for Hospitality industry. After recent security violating incidences Government have tight norms to increase the security level. Tourism is promoted by Government on very large scale. To hire a technical executive from country other than India no permission from Government is required.
?
Economic Factors:
o o o o o
High Growth is expected in Tourism industry. More immerging markets available for business - Africa, APAC & Middle East Infrastructure is not on par with Global Industry levels. Recent economic Slowdown can effect Tourism and hence Hospitality. High Inflation and Exchange rate are points against for the industry.
?
Social Factors:
o o o ?
With increasing disposable income financial power has increased. Due to more exposure to global environment life styles are changing. 40 per cent of the total population is from Urban middle class.
Technical Factors: o Computerization provides better and real-time status of inventory o Hotels offering LCD TVs, Wireless Web Connectivity & Conference facilities.
SWOT Analysis of Hotel Industry:
?
Strengths: o India’s rich culture heritage: India, with more than 3000 years of history is one big package of culture which rises expectation of a visitor. With presence of Himalayas, the vast Indo Gangetic Plains, lush tropical jungles and a long coastline, a visit to the country is a changing spectacle of religions, customs and festivals. o Demand–supply gap: There is a mismatch between the demand and supply of rooms in India at the moment. With little over a lakhs of rooms in the country, the size of the hotel industry is tiny compared to India's size and growth prospects. Demand will outpace supply in the short to medium term despite new capacities are expected to be added.
o
Government support: A few years ago, the Indian government had totally neglected tourism, at an extent that no funds were allocated for tourism. However, government have realized the importance of tourism and ‘Incredible India’ campaign is an outcome of this. In addition to this, infrastructures, modernisation of airports, open sky policy are some of the other initiatives.
?
Weakness: o Poor support infrastructure: India is allocating miniscule amount on infrastructure. In comparison to China, who spends ~10% of its GDP on Infrastructures like Roads, Airports, compared to just ~4.5% of GDP of India. Opportunities: o Rising Income: Domestic Tourism has witnessed a growth of more than 30%. As per capita income has grown by more than 6%, the present-day has witnessed consumption boom in India. This is a strong opportunity, as spending is likely to sustain for a longer period. Higher disposable incomes are also expected to enhance the concept of travelling for leisure.
o
?
Open sky benefits: The opening up of the aviation industry in India has brought vital opportunities for the hotel industry. Increased competition
among airline companies will lead to the development of new and improved services.
o
New business opportunities: The commercial zones which are being developed in metro suburbs and secondary markets will invite surge in accommodation demand. This provides a unique opportunity for hospitality projects. Also the new concept, which is going to gain importance, is that of budget hotels. Due to their inherent nature of operation, costs involved and flexibility, budget hotels will be better suited to withstand the next economic downturn.
?
Threats: o Event risk: Dependency on foreign tourism can be dangerous as travel decisions are based on global patterns and on events that happen elsewhere. Events like terrorist attacks, serial bomb blasts have severely impacted the tourism industry and the threat remains. o Increasing competition: Global hospitality majors like the Four Seasons, Shangri-La and Aman Resorts are making their entry into the Indian market. The Hilton Group is deciding on a comeback and has tied up with the Oberoi Group. The Carlson Group and the Marriott chain are furiously looking for new hotels in India cities. This will increase the competition for the existing Indian hotel majors.
Company Analysis
Company Description: Incorporated, in 1903, by Jamshed N. Tata of the Tata group, Indian Hotels Company Limited (IHCL) is India’s largest hospitality company. IHCL and its subsidiaries are collectively known as the ‘Taj Hotels, Resorts and Palaces’. Taj Hotels Resort and Palaces own and operate 93 hotels, 7 palaces, serviced apartments, 6 private islands and 12 resorts and spas, spanning 55 destinations in India and 16 countries across 5 continents and employ over 13000 people. Besides India, Taj Hotels Resort and Palaces are located in the United States of America, England, Africa, the UAE, Maldives, Malaysia, Bhutan, Sri Lanka and Australia. The company proposes to increase its inventory to ~15,843 rooms across 130 hotels by the end of 2012-13. With the promoter group holding 33.6% stake in the company, IHCL is listed on the BSE and NSE. The Taj Hotels Resorts and Palaces is grouped into four distinct business segments Luxury, Upper Upscale, Upscale and economy/budget categories to provide consistency across the different hotels and standardise offerings. Of these, the luxury properties in metro and key leisure destinations are largely in the books of IHCL while the rest are held through subsidiaries and associates. The Group also operates a number of properties on pure management contracts. More details on operation of IHCL with different value segments of market are as stated next.
Taj (luxury full-service hotels, resorts and palaces) is flagship brand for IHCL. Spanning world-renowned landmarks, modern business hotels, idyllic beach resorts, authentic Rajput palaces and rustic safari lodges, each Taj hotel reinterprets the tradition of hospitality in a refreshingly modern way. Taj Exotica is resort and spa brand found in the most exotic and relaxing locales of the world. They are cantered around high end accommodation, intimacy and an environment that allows its guest unrivalled comfort and privacy. Taj Safaris are wildlife lodges that allow travellers to experience the unparalleled beauty of the Indian jungle amidst luxurious surroundings. Taj Safaris provide guests with the ultimate, interpretive, wild life experience. Vivanta by Taj Hotels & Resorts span options for the work-hard-play-hard traveller across metropolitan cities. The Gateway Hotel (upscale/mid-market full service hotels and resorts) is a pan-India network of hotels and resorts that offers business and leisure travellers a hotel designed, keeping the modern nomad in mind. Ginger (economy hotels) is IHCL's revolutionary concept in hospitality for the value segment. Intelligently designed facilities, consistency and affordability are hallmarks of this brand targeted at travellers who value simplicity and self-service. IHCL operates Taj Air, a luxury private jet operation with state-of-the-art Falcon 2000 aircrafts designed by Dassault Aviation, France; and Taj Yachts, two 3 bedroom luxury yachts which can be used by guests in Mumbai and Kochi, in Kerala. IHCL also operates Taj Sats Air Catering Ltd., the largest airline catering service in South Asia, as a joint venture with Singapore Airport Terminal Services, a subsidiary of Singapore Airlines.
General Information about IHCL: Headquarters: Taj Hotels Resorts and Palaces, Oxford House, 15/17 N.F. Road, Apollo Bunder, Mumbai 400 001, India
Year of Founding: April, 1903 Number of Employees: 13,000+
Top Management: Top Management of IHCL is tabulated in following table. Name Abhijit Mukerji Anil P Goel Beejal Desai Beejal Desai Deepa Misra Harris Deepak Parekh H N Shrinivas Jagdish Capoor Jyoti Narang K B Dadiseth Mehernosh S Kapadia Nadir Godrej P K Mohankumar R K Krishna Kumar Ratan N Tata Raymond N Bickson Raymond N Bickson Shapoor Mistry Veer Vijay Singh Yannick Poupon Designation Executive Director Executive Director Vice President - Legal & Company Secretary Secretary Sr. Vice President - Sales & Marketing Director Sr. Vice President - Human Resources Director Chief Operating Officer - Luxury Hotels (India) Director Executive Director Director Chief Operating Officer - Gateway Hotels Vice Chairman Chairman / Chair Person CEO Managing Director Director Chief Operating Officer-Vivanta Hotels Chief Operating Officer - Luxury Hotels
Shareholding pattern: Shareholding pattern for IHCL is as follows. Shareholding pattern - Indian Hotels Company Ltd. % No of Holder's Name Share Shares Holding Promoters 303066116 37.53% Financial 166122755 20.57% Institutions
General Public Foreign Institutions Other Companies Banks Mutual Funds Others Foreign Industries Directors Central Govt
161615594 100934945 45544470 12365969 11482277 5575426 433755 43400
20.01% 12.50% 5.64% 1.53% 1.42% 0.69% 0.05% 0.01%
Financial Performance of the Company: Capital Structure of IHCL is as per following table. Capital Structure - Indian Hotels Company Ltd. Authorized Issued Instrument -PAIDUPCapital Capital To 2012 Equity Share (Rs. cr) 100 (Rs. cr) 75.9 Shares (nos) 759472787 Face Value 1 Capital (Rs. Cr) 75.9
Period From 2011
Revenue Growth – At the standalone level, IHCL reported a 7% y-o-y growth in revenues in Q3, 2011-12 driven by a combination of increase in inventory across key markets, such as the newly re-launched heritage wing in Taj Mahal Mumbai and the Falaknuma Palace in Hyderabad, and moderate RevPAR growth in a few markets. While Bangalore, Kolkata and Jaipur reported increase in occupancies, markets such as North Mumbai, Bangalore, Hyderabad and Goa reported ARR growth. Overall Goa, Jaipur and Bangalore remained the best performing markets during the 9M, 2011-12. However on the whole, for a seasonal peak, the ARR/Occupancy growth across a majority of the markets remained fairly muted owing to the uncertain economic environment. Further the performance of key markets for the company such as NCR and Chennai has been impacted by new supply. Profitability – Despite the revenue growth, the company (standalone) reported a 2.4% decline in operating profits owing to one-time expenses related to opening of the Vivanta at Bangalore and higher employee costs. Further the company reported extraordinary forex losses and under-recovery on insurance claims for the 26/11 attacks on Taj Mahal Mumbai leading to stagnant profits after tax (PAT). The company’s consolidated performance is likely to be further impacted by the muted performance of its overseas properties. Capex – IHCL’s capital commitments over the near term remain limited with only two ongoing projects (Dwarka and Guwahati), both of which would be funded with internal accruals. The company does not propose to raise any further debt over the next 18 months. However the group continues to rapidly expand its portfolio through management contracts and new projects in associates/JVs.
SWOT Analysis of IHCL:
?
Strengths: o Brand Value: With one of the most loyal brand name from Tata, IHCL enjoys a great brand value. o Infrastructure and Best in class services: IHCL has some of the world class infrastructures coupled with best service in country in its class. o Sales and Marketing network: Strong Sales and Marketing network is one key stretch in growth of IHCL. o Strategic Expansion Weakness: o Dependency majorly on Indian Territory: IHCL has its major chunk of business in Indian Territory. Dependency on single geographical territory limits new opportunities.
o
?
Dependency only high end Luxury Segment: Same as territory IHCL has its most business in High and Luxury segment. Again dependency on single segment is dangerous, more diversification is required.
?
Opportunities o Rapidly growing market in India, South Asia and key gateway cities in sourcemarket destinations can be a very good opportunity to diversify its operations and range. o Expansion in international destinations o Growing demand in the budget and mid-market segments. o Extending the product portfolio in luxury residences, wildlife lodges and spas. o Favourable Market Dynamics o Focus on Meetings, Conferences, Exhibitions, Eco-tels/Budget Hotels o Lobbying for improved Infrastructure status Threats: o High Competition o General downturn in global economies o Interest rates fluctuation o Cheaper international airfares o Growing presence of international hospitality chains
?
doc_530979117.docx