PM's Austerity Measures Seen as Potential Boost for Domestic Travel

Indian Hotels Company Expects Boost in Domestic Travel Demand

Prime Minister Narendra Modi's appeal to citizens to postpone foreign travel and opt for work from home may have a positive impact on India's domestic travel demand, according to a top hospitality executive.

Puneet Chhatwal, managing director and chief executive at Indian Hotels Company (IHCL), believes that the Prime Minister's call could benefit the company in the medium to long term. "People spending more money in India and getting married within the country" could lead to increased demand for domestic travel, he said.

IHCL, the parent company of Taj Hotels, is also working on campaigns to promote work from its homestays in driveable distances from cities. This move is in line with the Prime Minister's call to promote work from home in a bid to save fuel.

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Despite facing disruptions in some areas, the travel sector has proven to be resilient, particularly since the COVID-19 pandemic. Chhatwal stated that while last year was not an easy year, with several challenges including the Pahalgam attacks, Operation Sindoor, the aircraft crash in Ahmedabad, the Indigo fiasco, and the West Asia war, the company is optimistic about the future.

IHCL's Transformation Year

FY26 marked a significant year of transformation for IHCL, with the company signing 250 hotels across its brandscape through inorganic and sustained organic growth. This includes the onboarding of Claridges Collection and acquiring controlling stakes in Atmantan, Brij hospitality, ANK, and Pride hospitality. These acquisitions are projected to contribute over Rs 250 crore in incremental value.

During the year, IHCL opened and onboarded over 130 hotels, taking its operating hotels to 373 hotels with an inventory of over 33,000 rooms. The company aims to consolidate, strengthen, and sharpen its brands, which are in the stage of "infancy." It plans to open 60 new hotels during FY27, which will help drive "double-digit growth" during the year.

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Capital Expenditure and Growth

IHCL has earmarked Rs 1,200 crore for capital expenditure in the year, which will include the expansion of Taj, Lucknow, and upgradation of the Gateway-branded property in Calicut. The company has a robust pipeline of over 2,000 keys for the future and cash reserves of Rs 4,345 crore to propel growth.

Impact of West Asia War

The ongoing West Asia war has impacted IHCL's international portfolio, particularly destinations connected by Emirates routes. Chhatwal stated that destinations like Dubai, driven by Emirates, and London in the UK have been affected, with occupancy reduced to 25 percent in Dubai. However, the company has been able to mitigate the impact in far-off destinations.

Revenue Growth

IHCL reported a 14.9 percent hike in consolidated net profit to Rs 600 crore in the March quarter from Rs 522.3 crore in the year-ago period. Its revenue from operations grew 14 percent to Rs 2,765.3 crore from Rs 2,425 crore in the same period last year.