Indian Hotels announces pipeline of 24 hotels [Infographic]
Indian Hotels plans an ambitious push for growth. (Photo: Ginger Uttar Pradesh)
Indian Hotels Company boasts a solid pipeline and gets serious about debt reduction and asset-light growth.
Indian Hotels Company reports record growth in earnings and plans to use the funds for ambitious growth and debt reduction.
We find out how the company will move forward.
Soaring earnings and a strong pipeline
Recently Indian Hotels Company reported third-party results of $65m of EBITDA, up 32% in Q1 2020 marking the highest point in the last 10 years.
This comes after the group opened nine new properties in nine months, one of which was the 50th hotel under its Ginger brand. Ginger alone now boasts a portfolio of 4,400 rooms across 35 cities.
Another 24 hotels are currently in the development pipeline and Indian Hotels announced they are taking active steps to cut debt as part of their strategy to sell non-core assets.
So far, the company managed to reduce its debt levels and reported that its net debt to EBITDA ratio was down from 2.11 to 1.76.
Puneet Chhatwal, managing director & CEO, IHCL said: “In line with Aspiration 2022, the company reported seven consecutive quarters of consistent and sustained growth. The re-imagined brandscape enabled us to add a record 24 hotels to the development pipeline. IHCL kept its promise of opening one hotel a month. It began 2020 with the opening of another magnificent palace, the Taj Fateh Prakash Palace in Udaipur.”
Giridhar Sanjeevi, EVP & CFO, IHCL said: “This has been a good quarter on all parameters including debt reduction, asset management initiatives on sale of non-core assets, as well as higher cash flows.”
Moving forward with promising projects
In 2019, Indian Hotels Company agreed to a $600m fund with GIC. Now the company is investing in luxury, upper-upscale and upscale hotels around India by acquiring fully operational hotels, including distressed or underperforming properties which have strong potential for being turned around.
This expansion will be in keeping with IHCL’s desire for asset-light growth, with the equity contribution from IHCL at 30% and the remaining 70% contributed by GIC. All hotels will be run under management contracts with IHCL.
“We are delighted to partner with GIC, one of the most reputable global investors. This collaboration is in line with Aspiration 2022 and our vision to scale up, create greater enterprise value and make IHCL South Asia’s most iconic and profitable hospitality company. Through this platform, we expect to acquire strategic and marquee assets that need new ownership, branding and positioning,” Mr Chhatwal elaborated.
According to the TOPHOTELCONSTRUCTION online database, 158 hotel projects are currently in the pipeline in India:
Let’s take a look at a few hotel projects by The Indian Hotels Company: