Indian Hotels plans to phase out Gateway, Vivanta brands

Trade

• Watchlist
• Portfolio
• Message
• Set Alert

 

 

live

• bselive
• nselive

Volume

Todays L/H

More

×

Swaraj BaggonkarMoneycontrol

The country’s second-largest hotel chain Indian Hotels Company (IHCL) will rebrand most of its 55-60 Gateway and Vivanta by Taj properties to bring them under the Taj.

This is part of the major restructuring exercise the company started more than a year ago which also includes becoming more streamlined in reporting structure, getting more cost-efficient, to be able to return to profitability.

The Gateway and Vivanta by Taj brands were launched by the company eight years ago under the stewardship of the then Managing Director Raymond Bickson. The new brands were a part of IHCL’s plan to counter the sudden burst of international brands onto the Indian market.

While the Indian Hotels is trying to convert most of the properties to Taj company, insiders say that it will not be possible to get everything under the luxury banner Taj. It is also a process which will take more than a year to complete.

“Both Gateway and Vivanta were unable to get the traction and remained in the shadow of the Taj. People were unable to identify what the two brands offered even years after they were launched commercially”, said an IHCL executive.

The upscale brand Gateway was Taj’s answer to the Holiday Inn while the upper upscale brand Vivanta by Taj was aimed to rival Hilton and the likes.

Ironically, IHCL’s latest move is targeted to reinforce IHCL’s loosening grip on the Indian hospitality market, according to Managing Director, Rakesh Sarna. “We have to take a step back if we have to go forward”, Sarna said at the unveiling of the master plan.

The move will make Taj the single largest operating brand in India. All Taj properties will be classified on the basis on Hotels, Resorts, Palaces and Safaris. The company is opening a new 70 room resort in the Andaman island with a soft launch expected in June-July this year.

The Indian market is today flooded with hotel and resort brands from almost every major hotel company in the world. West-based hotel majors like Marriott-Starwood, Hyatt, Intercontinental, Four Seasons, Hilton have made significant inroads in India over the last decade.

IHCL, despite its size and legacy (113-year-old company with more than 100 properties in India and worldwide) the company has not been able to compete against the western onslaught. It is yet to record profits since 2010-11.

The company is making efforts to cut its debt which has been the main reason behind the recurring financial losses. To that effect, the company sold some of its valued properties such as the Taj Boston, in the US and Blue Sydney in Australia.