Covid19 hotel development analysis: The Indian Hotels Company [Infographic]

by | 29 Jun 2020 | Portfolio

Hotel Vivanta Chennai (Picture:

Our exclusive series turns its attention to how The Indian Hotels Company is responding to the pandemic and considers what impact Covid19 may have on its development pipeline.

South Asia’s largest hospitality company by market capitalisation, The Indian Hotels Company has experienced plenty of turbulence as a result of the Covid19 pandemic. The Mumbai-headquartered business, part of Indian conglomerate the Tata Group, was founded in 1899 and is behind a string of prominent hotel brands including Taj, Vivanta and Ginger, with sites across Asia, Africa, Europe and North America.

Here, we take a closer look at The Indian Hotels Company’s development pipeline in the context of coronavirus. To give us a more round picture of the business, we also examine how its share price has held up in recent months, and reflect on how management is dealing with the challenges presented by the global health emergency.

The Indian Hotel Company’s development pipeline

Interestingly, it seems The Indian Hotels Company is steadily moving ahead with bringing its hotel development pipeline to fruition in spite of the pandemic. Based on our exclusive analysis of data from the TOPHOTELCONSTRUCTION database, it currently has 26 projects in progress as of 10 June 2020, with just one further scheme on hold and none cancelled.

In terms of brands, Vivanta by Taj has the highest number of active projects (11), followed closely by Taj Hotels Resorts and Palaces (ten). Ginger Hotels and Resorts (four) and Taj Exotica (one) also have schemes in progress:

At this juncture, we should point out that the unpredictable nature of Covid19 makes it impossible to know for sure how the global hotel development pipeline will be affected, since regional flare-ups and localised outbreaks can rapidly put paid to even the best-laid plans. Having said all that, the fact that The Indian Hotels Company is actively progressing all but one of its schemes suggests that – for now at least – coronavirus has not caused too much disruption to the management team’s ambitious expansion strategy.

The Indian Hotels Company’s share price halves

One of the key factors behind the ability of any business to grow, however, is its financial position. As a listed entity, The Indian Hotels Company’s shares are regularly traded on the markets, and by looking at whether their value has increased or decreased over the months, we can start to get a sense of how investors’ perceptions of the business have changed.

At the start of the year, shares in the company were trading at around 140 Indian rupees (US$1.84); on 27 February 2020, for example, the price was 140.95 rupees per share. However, there was then a sharp deterioration in investor confidence as Covid19 began to spread rapidly around the world, and by 3 April the share price had fallen to just 69.35 rupees – less than half what it stood at just over a month earlier.

Since then, the price has remained highly volatile in common with most hospitality stocks, but has still managed to make some limited gains. As of 19 June, shares were trading at 83.35 rupees.

More than one hotel a month

It’s certainly been a dramatic few months for The Indian Hotels Company and this is reflected in the public statements that the business and its leaders have made over time.

Back on 24 February 2020, when the company sent out a press release sharing key updates on its five-year business strategy, there was no mention at all of Covid19. Instead, investors were told that one of its key highlights for the year ending 31 March 2020 was that the business had managed to open 12 hotels in 11 months, and that its aim was to open more than one hotel every month in the year ending 31 March 2021.

Puneet Chhatwal, managing director and CEO of The Indian Hotels Company, added: “We signed 50 new hotels in the last two years and this growth momentum has helped us reach a portfolio milestone of 200 hotels including 42 hotels under development. We will continue to focus on capturing emerging opportunities across the hospitality industry landscape, thereby creating significant value for all our stakeholders.”

Protecting the business from coronavirus

Of course, the situation in India and elsewhere changed dramatically over the course of March and April as coronavirus really began to take hold, and it was widely reported on 11 May that Chhatwal had pledged senior leadership would “contribute a percentage of their salary this quarter to help with the survival phase of the company”.

In an email to employees, he also revealed that “we will need to continue evaluating this month-on-month and take some tough decisions as the situation evolves”. And he noted that various interventions were being evaluated and implemented, including “manning, renegotiation of contracts, deferment of renovations, hiring freeze” and other cost-control measures.

Well-positioned to combat Covid19

On 10 June, The Indian Hotels Company posted its results for the year ending 31 March 2020, with revenues remaining steady at 45.96 billion rupees (US$604.5 million), EBITDA climbing by 20% to 11 billion rupees and profits after tax increasing by 24% to 3.54 billion rupees. The company also asserted that it was readying itself “for post-Covid opening with new and stringent hygiene, sanitisation and social distancing protocols across its hotels”.

Giridhar Sanjeevi, executive vice president and chief financial officer at The Indian Hotels Company, added: “The culture of performance, business sense and financial prudence institutionalised within the organisation has positioned us well to combat the challenges posed by Covid19. We are confident of resetting and rebounding stronger.”



The Indian Hotels Company (IHCL) and its subsidiaries, collectively known as Taj Hotels Resorts and Palaces, is one of Asia's largest and finest group of hotels.