ITC to expand hotels chain by two-thirds

This story first appeared in DNA Money edition on Wednesday, September 26, 2012.

ITC Hotels is aggressively pursuing an investment-led growth strategy to become the largest hotel operator in India.

A part of ITC Ltd, the chain is targeting 150 hotels across four accommodation categories in the years to come.

It currently has around 90 hotels in over 70 destinations across India.

As many as 40 hotels are at various stages of development, according to Nakul Anand, executive director, ITC Ltd.

“These hotels are either owned or managed by us under one of the four brands. The intention is to double capacity in the next few years in terms of rooms, across the brands,” said Anand, adding that the company has an outlay of Rs9,000 crore for the hotels business.

He said the company is committed to competitive growth and deploying its full portfolio across the four segments. “That is what we believe is required to successfully deliver on our ambition and goal to attain competitive growth. All the funding will be done through internal sources,” he said.

In line with its ‘responsible luxury’ ethos, the company recently opened a brand new, 600-room integrated super premium luxury hotel, ITC Grand Chola, in Chennai. Built at an overall cost of Rs1,200 crore, this is the world’s largest LEED Platinum Green Hotel in the new construction category.

LEED, or Leadership in Energy and Environmental Design, is a rating given by India Green Building Council (IGBC) under licence from the US Green Building Council.

This new hotel is an addition to seven existing hotels in Chennai, Ooty and Madurai.

Other additions include a 500-room hotel adjacent to the ITC Sonar in Kolkata and an ITC resort property in Manesar. The development pipeline currently encompasses 3-4 hotels under construction (the premium segment) and another 6-7 hotels on the drawing board.

“In the course of the next few years, we’ll consolidate our position in main metros and Tier II cities with critical inventory across our multiple brand portfolio. While pursuing this, we are constantly evaluating potential opportunities in leisure destinations as well like Goa and Kerala to name a few,” said Anand.

Focusing on niche areas and providing differentiated value propositions, ITC Hotels has been leveraging on the country’s unique advantages in terms of diversity and heritage. The company caters to the emerging needs of travellers through ITC Hotels (luxury), WelcomHotel (five-star), Fortune (mid-market, upscale) and WelcomHeritage (heritage leisure).

Adding another dimension to the Fortune brand, the company has introduced a new product under the My Fortune brand. The new offering is mainly targeted at upscale business travellers. This apart, the company has undertaken a re-branding exercise for hotels under the WelcomHeritage brand with the introduction of Legend Hotels, Heritage Hotels and Nature Resorts.

ITC Hotels has been considered a game changer since its inception a little over three decades ago. The company pioneered the concept of providing luxury accommodation in cities like Ahmedabad, Bhubaneswar and Amritsar, which were hitherto not considered as sought after markets in this category. The company also has to its credit of being the youngest among Indian chains and is recognised as the fastest growing chain in the country in the very first decade of inception.

“Our business philosophy is to continue to make a meaningful contribution to the overall economic development of the country in multiple ways while enriching the tourism landscape of the country. We believe that business can and must play a role. Therefore we have consciously moved from a single dimension of financial value creation to a triple bottomline philosophy of creating value that encompasses the economic, environmental and social dimension,” said Anand.