Luxury: The New Currency For Hotels

Branded and boutique hospitality players look at spreading their wings amid rising room tariffs and occupancy rates

- V. Keshavdev

INDIAN ENTREPRENEURS’ tryst with the hospitality business has always been a fascinating one. If Jamsetji Nusserwanji Tata, the founder of the Tata Group, built the Taj Mahal Palace Hotel in Bombay in 1903 following the discriminatory approach of the British towards Indians, Rai Bahadur Mohan Singh Oberoi laid the foundation for India’s second-largest hotel group in the 1930s when British businessman Ernest Clarke sold his hotel in Shimla to Oberoi, who had to mortgage his wife’s jewellery and his assets to buy the same. Even today the allure of hospitality is such that every other celeb or sports personality has dabbled in either opening a restaurant or owning a hotel.

But every time an economic downturn or catastrophic event takes place, it’s the hospitality industry that bears the brunt first and its after-effects can linger for longer than in other businesses. Hence, it is interesting to see the industry enjoying a remarkable turnaround since the pandemic. With the rise of domestic tourism and opening of international travel, occupancy rates and average room rate (ARR) have skyrocketed, giving players a chance to make money. At least for now.

Puneet Chhatwal, CEO of Indian Hotels Company, the country’s largest hospitality player and South Asia’s largest hospitality company by market cap, set the tone of the year, post the Q4 earnings call. “If we take the three best consecutive years in the history of Indian Hotels, 2006 to 2008 and 2017 to 2020, the combined performance of the three years is less than the financial performance of this year,” said Chhatwal.