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Informist, Tuesday, Jul. 21, 2026

 

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--Indian Hotels: Seeing strong domestic demand after PM's austerity appeal 
--CONTEXT: Indian Hotels mgmt comments in post earnings conference call 
--Indian Hotels: Govt events demand subdued following PM's austerity appeal 
--Indian Hotels:Ready to share renovation cost with others to expand globally 
--Indian Hotels: Remain focussed on asset-light model for global expansion 
--Indian Hotels: Not hopeful of demand rebound in air catering in Q2 
 

 

By Avishek Rakshit and Astha Oriel

 

KOLKATA/NEW DELHI – Indian Hotels Co. Ltd., which is targeting expansion into new countries in Southeast Asia and Europe, is eyeing properties under a revenue-sharing model and is also ready to share renovation costs with owners and developers to add new properties to its portfolio. However, the hotelier will maintain an asset-light model so that it does not incur substantial investments in the course of its global expansion. 

 

"We will work on a capital-light model and not capital-heavy. It's not our strategy to start buying hotels, whether in Southeast Asia or in Europe," its Managing Director and Chief Executive Officer Puneet Chhatwal told sector analysts in a post-earnings conference call Tuesday. "But if there was, like, an asset that exists and needs a renovation, let's say, $10 million, and we have to put in $5 million, 50% of it or 60% of it, anything related to the brand, we will do that."

 

In the June quarter, Indian Hotels signed 20 new hotels, taking the total portfolio to 645 hotels. Of this, 263 hotels are in the pipeline, and the company is set to spend over INR 3 billion in the current financial year to renovate rooms.

 

"Preferably in all these markets, with the exception of Bangkok or Bali, Singapore, Switzerland... these are institutional capital-driven markets where the return expectations of institutional investors on an operating lease are around 5%, 6%, 7%. And we would consider them in that kind of model with a rev share opportunity," he said.

 

Chattwal said in the June quarter, Indian Hotels saw an increased uptick in demand in its domestic portfolio as Indians preferred to spend holidays in the country rather than vacation out of India following Prime Minister Narendra Modi's appeal for austerity measures to curb foreign exchange outflows from the country. 

 

While it proved to be a boon for Indian Hotels' domestic business, demand and the uptick in its international properties were impacted negatively. At the same time, a lower number of foreign tourists arrived on Indian shores, which partly impacted the domestic uptick. However, it was compensated by increased room bookings by Indians.

 

The austerity measures by the government also resulted in fewer government events at its hotels, resulting in a loss of potential revenue from the events and conferences segment in the June quarter. "International segment, we were a bit not fortunate in the last four months," Chattwal said. 

 

Indian Hotels spent 17 million pounds on its hotel in London to create a new lobby, bar, cigar lounge, whisky lounge, and doubled the number of chambers. "It was delayed by three to four months because of supply chain disruptions. It's all complete, all operational as of this month and is very well received. Same thing happened in New York," the top official said.

 

In its New York hotel, the company suffered a pipe burst in February, which put 49 rooms out of order. While half of the affected rooms are expected to return to order in the next 2-3 months, the rest of half of the affected rooms will need to be gutted completely and rebuilt.

 

Room occupancy rates at its hotels in West Asia are around 60-80% and one hotel is currently earning half of the normal revenues, the top company official said. "There is a direct correlation between Dubai and the West Asia crisis. It also has an impact on our international business in Maldives, because a lot of traffic in Maldives, Sri Lanka, including in London, and Cape Town is routed through Emirates as an airline. And if people are psychologically afraid of going to that region, they will not connect from there," he said. 

 

While revenue from hotel services, which account for 87% of the company's top line, grew nearly 17% on year to INR 20.45 billion in the June quarter, the revenue from air and institutional catering services, which account for the remaining 13% of the revenue, increased just 3% on year to INR 2.96 billion. Chhatwal said it was primarily on account of airlines scaling down operations, particularly of long-haul flights, after fuel prices increased. "Q2 (Jul-Sept), we are not very hopeful that things will rebound quickly," he said. 

 

Tuesday, shares of Indian Hotels closed 0.9% higher at INR 731.60 on the National Stock Exchange. The company announced its June quarter earnings after market hours. End

 

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Edited by Saji George Titus

 

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