Puneet Chhatwal Curated

MD & CEO, Indian Hotels Company Limited

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This profile has been added by users(CURATED) : Users who follow Puneet Chhatwal have come together to curate all possible video, text and audio interview to showcase Puneet Chhatwal's journey, experiences, achievements, advice, opinion in one place to inspire upcoming operations managerss. All content is sourced via different platforms and have been given due credit.

  • What impact has the Corona virus had on tourism in India?

    In any given quarter, something or the other keeps happening all over the world. I have mentioned that on the previous interviews too. So, of course, the Q4 also started with some kind of volatility in the market because of the situation with certain colleges and universities and the youth versus whatever we read about in the newspaper and television — that does have an impact on hotel business in general and also, tourism coming into the country in particular.

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  • How do you increase its market share and improve cost optimization as well?

    We have a strong desire to cut waste; there is a risk within legacy companies – and we are over 100 years old – that the we continue to do new things, but we do not stop doing old things. Our business revolves around our guests – so we ensure that all these measures do not impact negatively on them. There are a lot of programmes, which have started over the past 30 or 40 years, which are no longer relevant, and these must be removed, there needs a clean-up. We must seek to do more things efficiently – this does not mean just taking out employees from a hotel, that is not part of our philosophy. Our company, as part of Tata Group, is built on the idea that the community is the most important stakeholder – the purpose of the existence of the business is for the good of the community. We are, thus, not into making cuts for a short-term gain; we are seeking to apply innovation to find new ways of doing things.

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  • How do you focus on international market, being rooted in India?

    The Indian Hotels Company Limited was, is and will remain focused on markets that are of a strong interest to the Indian diaspora and those destinations to which Indians travel. Over the long-term, we cannot rely only on Indians, but it gives us an advantage initially because you do not have to explain your brand. If we opened a Taj tomorrow in Birmingham or Manchester, half of the people in those cities would already be aware of our brand. The same with Toronto, Jakarta or Singapore or across the Middle East - it is easier than in, say, southern Europe, where the brand is awareness is weaker.

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  • How can Ginger, SeleQtions and Vivanta carve out their own brand identity?

    IHCL is predominantly known for its marquee brand Taj, which we will protect. However, in order to achieve sustainable growth and profitability, one needs to look at scaling and this will mean constantly keep an eye on the market dynamics. We adapted our branding approach to suit diverse, high-growth, and relevant market segments.

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  • How do you cater to each segment, considering Taj?

    Taj is an absolute luxury and is at the top. It surpasses that bracket of being top when you will get into Umaid Bhawan Palaces like Lake Palace, Umaid Bhawan Place, Rambagh Palace and Jai Mahal Palace. These palaces are not a five-star hotel, but it is 7-star, 8-star, 9-star and 10-star hotels. It provides a different experience from arrival experience to old-world charm and the style of eating at Baradari along with local dances and music goes beyond five stars. So I think that we have Taj Palaces and Safaris which are at the top and it is followed by Taj Business and Resorts, which stands at the five-star level and Vivanta comes at the upscale level and then comes Ginger. Besides, we have also created a new brand, Selection, which will be launched in April 2019. It is not a brand but is a collection of brand names. So, we have signed a contract for Cidade de Goa and it will stand by its original name. Similarly, Ambassador Hotel Delhi will remain Ambassador and Connaught, we have bagged the contract to operate it, will remain the same. Savoy in Ooty will remain the same. It has been named as Selection because it is a selection of names or collection of the names.

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  • What is the one thing that didn't work for the brand?

    Maybe it's simplicity is a reason. It was not quite aspirational and that's why that we have changed its position and have started to define it as lean luxe instead of budget and economy. This means these are luxury hotels that are lean and mean in nature, that is cost-effective, where one can get almost everything like the atmosphere in the lobby music, guitar, play stations, opportunity to play soccer as well as rooms for your child.

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  • How did you strategise the positioning of your brands?

    It is simple, and this is a place where I had some involvement and there is a reason behind it. I was lucky to spend 30 years of my life in Europe and see how the management works there. Interestingly, 15 of these 30 years were spent working with an American company. And, American companies are very strong in terms of brand. On the other side, our country, post independence never had such brands that turned up to be global. That is why people in India have a theoretical and superficial knowledge of brands. I don't want to say that no one has the knowledge, but the numbers are low. There is a trend in emerging markets where they follow the best brand. This is something that I saw here on my arrival, i.e., either they are Taj or little-bit Taj, for example, Vivanta by Taj, Taj Gateway Hotel and Taj Khazana among others. Thus, Taj was everywhere. What we did is that we allowed Taj to be Taj and removed its name from other things. So, it helped in ending the confusion. Besides, we openly said that we want to take part in every segment as it is available with other companies such as Tata Motors and Titan. They are in all segments from the lowest to the highest luxury segment. Thus, we want the same with Indian Hotels because India is a country of 1.3 billion people of different sections, which means you can get business from all these sections and we need that share too.

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  • What are the important changes that were implemented since you took charge of Indian Hotels?

    A person alone cannot bring such an improvement in performance. So our management team has worked very well for the purpose. It has been almost a year-and-a-half when the team and industry experts, had a three-day long strategy meeting in Goa. It was the place, where the Aspiration 2022 was prepared. The file defines the ways to work. Later, the document was presented in front of the Board and was approved in February 2018 after which we haven't shifted our focus from it. There are certain criteria for success like our operational performance has helped us in gaining market share. In addition, waste reduction and cost optimisation helped us in increasing our profitability. We have signed about 20 hotels in the process. We also worked a lot, created new brands and closed extra expenses that were spent on silos. Lastly, Aspiration 2022 is just 20% of the journey that we had in the last five years. That is why the coming year or two would be very important for us. We have confidence in the abilities of our team, brands, and existing fundamentals of the industry and they are suggesting that we will continue to grow in this journey.

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  • How has the connection with the community helped the group to create brand value and a strong foundation?

    Inclusion and business responsibility are embedded in our DNA, and we are proud to carry forward the beacon of community service. We promote livelihood (by facilitating skills training), support our neighbourhoods (by retaining their heritage and maintaining tourist sites) and drive societal welfare (through the Taj Public Service Welfare Trust and our charity activities). We have also inculcated best practices like procuring local and sustainable materials. IHCL is recognised as a pioneer and leader in sustainability and societal responsibility and has been a recipient of multiple awards and accolades for our contribution to society and nation building.

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  • What do you consider some inherent weaknesses and how do you expect to deal with those?

    With any 100+ year old organization comes its own set of legacy challenges. However, we believe that a weakness is also an opportunity. It certainly took us time to align the entire organization to rally behind the stated objective of Aspiration 2022 and start delivering in a collaborative manner. But as they say, a heavy tanker takes time to move, but when it starts rolling, it's difficult to stop it. Today, we are far more team oriented than individualistic and the results of working towards one goal is already visible in the eight consecutive quarters of margin expansion.

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  • What do you think are the biggest strengths of IHCL as a group?

    IHCL‘s biggest strength has been and remains our people. Our 32,000+ committed and passionate workforce bring significant value to its stakeholders. The company’s legacy of 116 years, underpinned with TAJ and Tata's core values, has won hearts and minds of the people. The rich portfolio spanning iconic hotels that are landmarks and symbols of hospitality, the authentic palaces, idyllic resorts, safaris, and lean luxe hotels are key differentiators for IHCL and have all been the recipients of many awards and accolades.

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  • What factors are leading to the growth of IHCL in the southern markets?

    The primary reason is that in each of the markets, we have been able to garner higher occupancies in hotels that were renovated last year. In Bangalore, we relaunched Vivanta MG road after an extensive renovation and upgraded the hotel to the Taj brand. The occupancies and RevPAR surged as a result. Similarly in Chennai, Taj Connemara opened after complete renovation and has been ramped up in occupancy significantly this year. Taj Fisherman’s Cove Resort & Spa and Taj Coromandel, too, have had a sizable increase in RevPAR after their renovation last year. In Hyderabad, we have a surge in RevPAR in Taj Krishna and Taj Deccan post their renovation last year.

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  • How has The Chambers been reimagined to meet the demands of a business traveller?

    The Chambers—Taj’s exclusive business club—was re-imagined and relaunched with enhanced features and benefits, including global membership and additional exclusive services and experiences. The Chambers at Taj Mahal Hotel, New Delhi is being renovated extensively to become the flagship Chambers of IHCL.

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  • Whats is your opinion on F&B being the core of the transformation of IHCL?

    The company is re-imagining its F&B offerings with new innovations and partnerships. IHCL has tied up with AB InBev, the world’s leading brewery, for an industry first on-site chain of microbreweries. We recently announced a partnership with globally acclaimed Italian restaurant chain, Paper Moon, and will open the first Paper Moon in India at Taj Fort Aguada Resort & Spa, Goa. We are also focused on scaling our F&B brands and are taking our iconic restaurant brands across the world. Shamiana opened at Taj Jumeirah Lakes Towers in Dubai. House of Ming will soon open at St James Court in London. Bombay Brasserie is going to open at Vivanta Heathrow in London, apart from having our presence in our London, Cape Town and Dubai hotels.

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  • What sort of brand equity do the SeleQtions and amã properties add?

    SeleQtions is a soft brand, a careful curation of famous and distinctive properties. These hotels have their own individual identity. amã Stays & Trails offers guests local immersive experiences in heritage and colonial bungalows. These brands offer IHCL a diversified portfolio so that, as a group, we can cater to different market segments and emerging customer needs around experiential travel.

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  • What are the checks and balances IHCL has put in place to ensure that the interference at leased properties in the running is minimum?

    Hotel owners are our partners in business operations. Aligning priorities with the owners is critical for efficient operations and business performance. We have a great relationship with our owners and work closely with them. We believe in a culture of inclusion wherein is active engagement and communication with the owner. We truly believe that our values of 'Trust, Awareness and Joy' form the cornerstone of the relationship with our owner partners. When owners trust us as an operator, are aware of our strategies and experience joy through mutual growth. Some of our owners have signed multiple hotels with us, such as Shriji Arvind Singh Mewar of Udaipur and the GVK group.

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  • How has the strategy of 'pure management’ contracts panned out?

    Our development strategy is well-poised to take our portfolio to a balanced 50:50 between owned or leased vs managed portfolio. In the last two years, IHCL has signed 50 new hotels, of which over 75% of the hotels are management contracts. This has helped us leapfrog the management contract mix in our portfolio from 32% two years ago, to 43% today. Presently, the share of management fees stands at 5% of our topline, but we expect it to grow significantly. Given the nature of the high-flow through (~75%) in management contracts, such portfolio growth will result in significant margin expansion.

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  • What have been the points of evolution for IHCL?

    The company has demonstrated a financial turnaround and delivered eight consecutive quarters of margin expansion in line with Aspiration 2022. The Profit After Tax, EBITDA and EBITDA margins for the first nine months of FY 2019/20 were the highest in a decade. The re-imagined brandscape has enabled the company to transform from a hotel business to a hospitality eco-system. We have managed to reposition and unlock value from our existing brands as well as foray into adjacent businesses, such as homestays, plantation trails,microbreweries, etc. The foundation of this journey has been a reengineered culture, renewed value systems, focus on collaborative performance and an enabling organic structure. We have achieved EBITDA margin expansion for eight consecutive quarters and 400bps since we announced Aspiration 2022. Significantly, we have reached a milestone of 200 hotels, with an inventory of over 25,000 rooms in over 100 locations. Fifty new hotels have been signed in the last two years and we have opened 12 hotels in 11 months, or over 1 hotel a month, in FY 2019-20, Ginger has reached a milestone of 50 hotels in operation, with 18 in the pipeline.

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  • How did you manage to make IHCL profitable without any staff attrition?

    Our people are integral to the enviable brand equity of IHCL. The first thing we did was to include 40 of our senior leaders in creating the ambitious 5-year business strategy. This was supported by ‘culture meets’ that helped in fostering an environment of collaboration and teamwork. It has helped people to take accountability, and become highly engaged and invested in the company’s success. We are also future-proofing our talent to ensure they are ready for the growth that is coming from within the industry and IHCL’s aggressive pipeline. In a growing company, there is an opportunity for all associates to not just grow internally through promotions and re-deployment, but also take up larger and more productive roles. We have collaborated with reputed international hospitality schools such as Les Roches and ESSEC. It is a step in the direction of making our employees future-ready.

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  • What have been your learnings and challenges?

    I came from a mature market to a market that is at an inflection point. I was fortunate to use the learnings and best practices from my international exposure to identify the DNA of the organisation and reinforce the culture for success. This journey was built on a strong culture of inclusion, empowerment, collaboration and focus on execution. A significant mindset change was required across the organization to believe in what was possible. At times, the inherent competitive spirit within Indian culture did tend to become a hindrance to team spirit. But today, I am pleased to note that the entire organization is working as one to achieve our 'Aspirations'.

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  • What has the journey of re-structuring IHCL been like?

    We have made significant progress on the key pillars of Aspiration 2022. Our re-imagined brandscape, with its unique experience and sustainable value proposition for each hotel brand, is resonating very well with our customers and partners. We have signed 50 new hotels in the last two years and this growth momentum has helped us reach a portfolio milestone of 200 hotels. IHCL has harnessed the diverse brandscape to drive growth through management contracts. Forty three per cent of our portfolio is now hotels on management contracts, as against 32% two years ago.

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