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Taj Hotels Resorts and Palaces Now Operates 59 Hotels
 Across India and 16 International Hotels
By Lijee Philip, The Economic Times, IndiaMcClatchy-Tribune Business News

Apr. 10, 2007 - MUMBAI, India -- Indian Hotels, owners of the Taj chain of resorts and hotels, is re-wiring its business strategy to ensure that one-third of its revenues comes from global acquisitions. Currently, overseas acquisitions account for around 20 percent of its revenues. After its three large acquisitions since 2005 -- W Sydney hotel in Woolloomooloo, Sydney, Ritz Carlton in Boston and Campton Place in San Francisco -- the company is eyeing the US, especially the west coast and other gateway cities like London, Paris, Frankfurt, Chicago, South East Asia, South Africa, China.

Domestically, its strategy is to re-develop and expand existing properties or set up greenfield hotels. Around 9,000 rooms is expected to be added to its current portfolio in the next one year. "We are doubling our inventory to 9,000 rooms across all our four categories -- luxury, boutique, budget and service apartments," said Indian Hotels MD Raymond Bickson. "The Taj property in Goa is expanding its current base and we are planning another hotel in Kumarakom in Kerala adjacent to our existing property," Mr Bickson said. Growth in inbound tourism and a demand-supply mismatch across the country have driven room rates up by 20-25 percent, industry sources said.

The Rs 1,127-crore Taj Group established nearly 100 years ago, with R Krishnakumar at its helm, runs 59 hotels at 40 locations across India with an additional 16 international hotels. The hospitality major's international focus has been in shoring up its luxury segment which now contributes as much as 75-80 percent of its revenue.

With travel on the rise and the addition of new rooms lagging, the global hotel industry is witnessing hectic M&A activity with investor interest ruling high, sources said. "We are focusing and expanding our domestic and international portfolio and selling properties that are identified as not the right fit in our portfolio," added Mr Bickson. Its recent West Coast acquisition of Campton Place, funded primarily by debt is likely to be completed on May 1. Over the past few years, Indian Hotels has diversified into a number of new areas such as budget hotels (Ginger brand), service apartments (with Portman Holdings)and even safari lodges (with an African company).

With more and more Indians travelling abroad both for business and leisure and looking for a comfort zone, the presence of a familiar brand makes it to the top choice for the traveller. This works on the reverse too, when the international traveller visits India, industry sources said.


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