Skift Take
IHCL’s bid to manage the Claridges Collection portfolio in India highlights its luxury strategy, especially as it follows the acquisition of the Tree of Life boutique hotels chain.
Indian Hotels Company (IHCL) said Thursday it would take over the management of the iconic Claridges Hotel in Delhi in April. Company executives described the move as a way to further increase IHCL’s share in India’s luxury hotel segment.
Indiaâs largest hotel operator, which owns the Taj luxury brand, said it had signed a management deal with Claridges Hotel Private Limited, which is not affiliated with The Claridge’s Hotel in London.
âThe Claridges has a strong luxury position,” said IHCL CEO Puneet Chhatwal during an earnings call. “This gives IHCL an opportunity to grow in luxury space with a differentiated offering distinct from the flagship Taj brand.â
The deal begins with IHCL managing the group’s property in Delhi. The hotelier will start running the other properties later.
Claridges Hotel Private Limited will retain the ownership of the properties and the brand names.
This business decision came as IHCL reported quarterly earnings, and said it was witnessing ongoing robust demand in domestic luxury travel.
Chhatwal shared that its key Taj brand achieved a double-digit growth rate in average room rates year-over-year.
IHCL’s “Premium Positioning”
Chhatwal said he expects average room rates to increase in all of the companyâs brands. His reasoning: IHCL has the ability to charge more for its rooms due to its brand power, strong loyalty program, and vast network.
The Taj brand helped IHCL command a 66% revenue-per-available-room premium over the industry averages, highlighting how luxury players are better positioned to pass on inflation.
The CEO touted the strength of Taj Hotels: “Nobody covers like Taj does the Indian domestic front… Our ability to charge is higher. Our ability to attract people is higher.”
Chhatwal cited the Taj Mahal Palace and Tower as an example, noting that its year-over-year rate increase was “more than 30%.”
Accommodations Sector Stock Index Performance Year-to-Date
What am I looking at? The performance of hotels and short-term rental sector stocks within the ST200. The index includes companies publicly traded across global markets, including international and regional hotel brands, hotel REITs, hotel management companies, alternative accommodations, and timeshares.
The Skift Travel 200 (ST200)Â combines the financial performance of nearly 200 travel companies worth more than a trillion dollars into a single number. See more hotels and short-term rental financial sector performance.
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