Indian Hotels Company Ltd (IHCL), which owns and operates Taj branded properties in India and abroad, will look to co-invest with Calcutta’s Ambuja Neotia Group for new luxury hospitality ventures.
The Tata Group hospitality arm may bid for projects jointly with the Neotias, especially when lands are being offered by governments to build new hotels. The two entities already have a strong relationship where IHCL comes as operator and Ambuja as property owner spanning 40 hotels, upcoming and operational, across several brands.
“We are looking to jointly invest with the Ambuja group,” Puneet Chhatwal, managing director & CEO of IHCL, said.
The duo recently bid for a hotel project in the Andamans, but it did not go through for technical reasons. But the partners are willing to explore future possibilities, especially for Taj branded luxury properties.
“We have a very open and informal relationship. Once you have the trust, there is no tension (to work together),” Harshavardhan Neotia, chairman of Ambuja Neotia group, added.
Chhatwal and Neotia were in Raichak, 50 kilometres south of Calcutta, where Taj Ganga Kutir and Spa was formally launched. This is the sixth Taj property, five of which are in Bengal, that Ambuja has built and IHCL has come as an operator. Ambuja is already in the process of building four more Taj properties in Bengal, including two — Darjeeling and Digha — that are already under construction.
While the new possibility is being explored for luxury Taj projects, Ambuja and IHCL are equity partners in a company that owns and operates Tree of Life boutique properties. Taj had many such equity partnerships in the past such as Taj GVK or Oriental Hotels, but it only partnered with Ambuja in the recent times. The model is a slight departure from the models pursued by hospitality companies now. Unlike in the past, investment in building hotels is left to owners while entities like IHCL comes as an operator.
Bullish on H2
Chhatwal, who oversees India’s largest hotel operator, predicted the second half of this fiscal year would be “very strong”.
“We had a very difficult first half due to the Pahalgam terror attack and then Operation Sindoor when 52 airports were shut. Moreover, there were rains, cloudbursts which affected the business. Despite that the sector witnessed improvement in rates and occupancy,” Chhatwal remarked, adding that the second half should be “very strong”.
He argued that demand would outpace supplies by at least 200 basis points (2 per centage) for the next three years at least as building new properties in India is not easy. Chhatwal, who heads many industry bodies on hospitality, urged the government to improve connectivity which would boost tourism and the sector.