Taj Hotels wants to turn asset light with its sell-and-lease-back strategy
- Indian Hotels — the hospitality arm of the
Tata Groupthat includes the Taj Hotels— is planning to put its properties under sale and lease back.
- Six of the
Ginger hotelsare already in line along with other hotels that come under joint ventures or associated companies.
- Indian Hotels is planning on becoming ‘asset light’ as the Indian economy cools off and consumer spending is starting to slow down.
Indian Hotels, the hospitality arm of the Tata Group that owns and operates the Taj Hotels, is looking to reduce its ownership of properties to 50% by 2022, as it wants to turn ‘asset light’. It has around 45 properties it owns under the Ginger brand, but wants to shed some weight by offloading 5-10% of the properties, and continue to operate it.
As part of our Aspiration 2022 business strategy we are pursuing an asset light model. In line with this we propose to sell and lease back some of our Ginger properties in non metro towns. We will continue to operate these properties under a management contract after the proposed sale.
Retaining flagship properties
The Managing Director and CEO of Indian Hotels, Puneet Chhatwal, told Bloomberg that while the company is looking to reduce its debt by getting rid of some of the
On the other hand, Indian Hotels also opened up three new hotels in key strategic markets like Goa and Agra as per last quarter’s earnings report.
It has also launched a new hotel brand called ‘SeleQtions’ to up its brand image. SeleQtions includes named and distinctive hotels as well as Chambers — India’s most iconic business club.
Cutting down on debt
India’s economy is cooling down and consumer spending is set to fall further, which is why Indian Hotels is looking to lighten its assets. Even, Jet Airways going out of business hit the Tata-owned enterprise, forcing the company to write off some of its dues.
Tata Group’s Indian Hotels isn’t the only brand under the umbrella that’s being revamped. Tata Steel and Tata Motors are also restructuring their portfolio to gain some headwind in the European markets.
Note: The article has been updated to include the statement from IHCL spokesperson to clarify that they will still be operating Ginger hotels and the headline has been changed accordingly.
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