Indian Hotels Company said has launched a five-point strategy under the banner ‘Reset’ to help overcome the impact of the pandemic, including contract renegotiation and asset sales.
The group has also extended its F&B offerings to target consumers at home.
Puneet Chhatwal, managing director & CEO, said: “The global travel and tourism industry was at a virtual standstill in the last three months, which had a big impact on the hospitality sector. While over 50% of IHCL hotels were closed for most part of Q1 due to government lockdowns, we implemented R.E.S.E.T 2020, a strategy to mitigate the impact of Covid-19; and several revenue enhancement and spend optimisation measures initiated have started yielding results. We remain confident, given the strength and power of our brand and our market leadership, that we will weather this disruption and emerge stronger.”
In a call with shareholders, Tata Group chairman Natarajan Chandrasekaran said: "In the past few months, the outbreak of the Covid-19 pandemic has developed rapidly into a global crises, resulting in an unfamiliar and uncertain terrain and affecting the very fundamentals of the world around us.
“Effectively managing our assets through sale of non-core assets and re-negotiation of contracts with its owners to arrive at win-win solutions can help release cash and further reduce expenses. Last but not the least, being thrifty and financially prudent is paramount for the company to survive through this crisis in order to revive its business and thrive in a post-Covid world."
The group reported an 85.9% drop in its revenue from operations for the quarter ended 30 June 30. CFO Giridhar Sanjeevi said the company had taken substantial steps to preserve liquidity. “In addition, we are rationalising all costs and maintaining the highest financial prudence. This will assist us in managing the evolving situation.”
During the period, Indian signed an agreement to acquire 100% shareholding in ELEL Hotels and Investments for the Sea Rock Hotel. It restructured its holding of Taj Cape Town, which becomes a wholly owned subsidiary of IHCL.
The group continued to expand, signing two hotels in the quarter – a Vivanta in Lucknow and an IHCL SeleQtions hotel in Tadoba Andhari Tiger Reserve, Maharashtra.
During the period the company launched Qmin, expanding its culinary offerings to include home delivery, currently available in five cities with a target of 10.
Chhatwal said: “This addition will augment the group’s F&B offerings leveraging a digital platform to address a growing consumer demand for online gourmet food delivery services. Qmin will scale up in the months ahead to include the gourmet Qmin Shop with delicatessen-based food choices. Taj has been home to our guests for more than a century. With the launch of Qmin, we bring Taj to their homes.”
Qmin will be integrated with the group’s loyalty programme in September, allowing guests to earn and burn points using Qmin services. The group also launched an app, designed and developed by IHCL in collaboration with Tata Digital, allowing users to order, curate menus, and track deliveries in real-time.
The company reported that it had achieved a milestone by setting a benchmark in hospitality for environmental sustainability with the highest number of EarthCheck Gold and EarthCheck Platinum certified hotels globally, with over 70 hotels having been awarded the EarthCheck Platinum and Gold certifications.
Insight: Chhatwal has a reputation for being nimble and finding an opportunity, particularly one which makes the most of the group’s relationship with parent Tata. When the sharing economy was set to bite he found a more profitable way to get into homesharing, looking down the back of the sofa and discovering that Tata had a number of homestay-worthy properties already.
The group launched Ama Trails & Stays, a group of heritage bungalows, guesthouses and homestays across India, tucking the new brand into its loyalty scheme at the same time. Chhatwal, told this hack: “It just happened as a result of the group chairman’s three S strategy: scaling, simplifying and synergising. We didn’t have to invest, we had these properties available.”
See also the expansion of the F&B offering into people’s homes for further details. Can’t come to the hotel? Eat at home. Keep the loyalty programme ticking over and oh look, Tata has a digital division to make the app. Thrifty and prudent indeed.