Ginger & Spice: IHCL new biz has growth flavour
Indian Hotels Company (IHCL) is betting big on its new businesses that it expects to grow at 35-50% every year, besides weighing an ambitious expansion plan for its reimagined brand, Ginger, as part of its strategy to accelerate growth.
The strategic rationale for new businesses lies in addressing India's varied market, and diversifying IHCL's revenue and non-linear revenue growth businesses, capital light businesses and those yielding high margins, Puneet Chhatwal, managing director and chief executive told ET.
IHCL's new businesses consist of a reimagined Ginger, Qmin, ama Stays & Trails and the Tree of Life brand.
«Through these, we are addressing a new segment, like homestays for instance, which was not popular before. We are addressing the needs of young, hassle-free travellers who want simple, clean rooms, but don't want to pay for a swimming pool or a spa,» he said.
«The potential of Ginger in India is anything between 500 to 1,000 hotels over the next 10 to 15 years. It's a high margin business because it's built more on a variable cost model than a fixed cost model. So, it's more crisis resistant. You can invest, you can do revenue share, you can do lease. It's not like blocking your capital in one big asset,» he added.
IHCL's new businesses grew at 37% in the June quarter, outperforming a 5-6% increase in the core enterprise. These businesses contributed 12% to IHCL's consolidated domestic hotel revenue.
The company's portfolio includes 225 operational hotels with 109 hotels in the pipeline as of
