India’s ITC Hotels is planning for growth, following its imminent demerger from the ITC group. Plans are in place to take the company from its current 140 hotels, to more than 200 hotels across India.
ITC Hotels has grown to date as a division of the much larger ITC conglomerate, a listed Indian business with most of its interests in consumer goods. The group board has already agreed to demerge the hotel business, allowing it greater freedom to develop as a standalone business. Details of shareholder allocations featuring shares in the new demerger entity have already been established, ahead of the split.
A shift to asset light growth
Currently, ITC has around 13,000 rooms in its 140 hotels across India, owning around 45% of the hotels and operating 55% under management agreements with owners. This mix is likely to orient more towards management contracts, as the group uses the asset light route over coming years, to expand its market presence. The company operates six brands, headed by the eponymous ITC Hotels, with Fortune, Mementos, Storii, WelcomHeritage and Welcomhotel.
In the last two years, since November 2022, the company has grown with the addition of 28 managed hotels. And it expects to maintain a similar rate of growth over the next two years, targeting to open an average of one hotel per month through the period.
For the quarter to September 2024, ITC’s hotel division reported a strong performance, with revenues up 12.1% year on year, and profit before tax up 20.2%. Strong cost control, and higher revpar off the back of strong booking demand enabled the group to expand its ebitda margin by 0.7%.
Recent openings include the Fortune Beachfront in Puri, a sea-facing resort; and a Storii hotel in the medieval city of Jaisalmer, in the Thar desert. The 131 room property is an ideal location for weddings and celebrations.
For the Welcomhotel brand, there have been recent additions in Jabalpur, with a 122 room hotel in the style of Bundela architecture; and in Belagavi, where a 116 room hotel is set in grounds extending to six acres, offering guests views across the windmills on the local hills.
Among upcoming hotels in the ITC pipeline are a Welcomhotel in Delhi, in Gangtok and in Gwalior. For the Storii brand, hotels are under construction in Jawai and Jaipur.
International expansion plans
In April 2024, ITC launched a hotel in Colombo, Sri Lanka, its first hotel outside India. The ITC Ratnadipa is a landmark development on the shores of the Indian ocean, with 352 rooms, suites and serviced apartments housed in two towers, connected by a stunning sky bridge. The project features no less than nine restaurants and dining options for guests and visitors. The hotel is also listed under Marriott’s Luxury Collection, providing a global reach, and a Sri Lankan destination for members of the Marriott Bonvoy loyalty programme.
