Tata Group-controlled Indian Hotels Company (IHCL), is aiming for 10,000 keys across 100 properties under Ginger Hotels as the 121-year-old company begins to start afresh amidst the COVID-19 pandemic.
IHCL’s Ginger portfolio comprises 78 hotels across 50 cities, including 24 properties under development.
Although the entry segment hotel brand has been loss making for IHCL, it has one of the best occupancy levels across the group.
IHCL has three other hotel brands Taj, Vivanta and SeleQtions.
Speaking to shareholders at the 121st annual general meeting (AGM), N Chandrasekaran, Chairman, IHCL said, “We have about 78 properties under Ginger and we expect to go to 100. Our goal is to aggressively grow the Ginger brand.”
From being a no-frills, basic, economy hotel brand, Ginger underwent a major mid-life repositioning exercise in late 2018 to make the brand aspirational. Calling it ‘lean luxe’, Ginger has been redesigned as an on-the-go’ lifestyle for young customers who are its target audience.
“In the last two years we have standardised the property, brand, and the financial model to make it attractive, so that it makes positive EBITDA (earnings before interest, taxes, depreciation, and amortization). A 100-room property can be very attractive in ownership and management contract model. We want to achieve 10,000 keys in the Ginger brand over the next three years,” Chandrasekaran added.
Since the end of 2018, Roots Corporation (RCL), the subsidiary of IHCL which owns Ginger, has added 33 properties at an average of more than one property opening every month.
During FY21, Ginger achieved 63 percent of its previous year’s turnover, aided by a recovery in accommodations, increased revenue from its new food and beverage outlets and raised fees from managed properties.
IHCL holds 67.11 percent in Roots Corporation, as of the end of FY21.
RCL recorded revenues of Rs 134.86 crore for the year ended March 31, 2021, a drop of 37 percent compared to Rs 212.65 crore recorded by year ended March 31, 2020.
It registered a loss of Rs 49.38 crore for the year FY21 as against Rs 22.77 crore loss recorded for FY20, the annual report of IHCL stated.
“We have 56 hotels in the pipeline; majority of them are management contracts and some are under ownership model,” Chandrasekaran added, when talking about IHCL’s hotel pipeline.
The board of IHCL on June 25, proposed to consider and approve raising of funds by way of issuance of non-convertible debentures of face value of Rs 1,000,000 aggregating to Rs 250 crore by way of private placement.
Chandrasekaran further informed that the India hospitality sector lost roughly about Rs 90,000 crore in 2020 with the REVPar (revenue per available room) dropping significantly to around 55-60 percent.
Battered by COVID-19, the sector is staring at a long road ahead to recovery with foreign tourist arrivals in India expected to remain negligible and local level restrictions playing spoilsport for the rest of the year.