Indian Hotels Company Ltd.

Attempting a Broad Competitive Niche Without Diluting Brand

Taj Hotels

• Recognized as Asia’s Largest and Finest Hotel Companies.

• International Presence like – UK, USA, SriLanka, Maldives, Middle East, Australia, Seychelles etc.

• Expanded with 73 Hotels in 15 countries on 5 continents, more than 9200 rooms.

• Grouped in Luxury, Leisure & Business Categories.

TAj Hotels & Resorts

Areas of Business• Taj Hotels Resorts,

Palaces, Luxury, Leisure & Business

• Taj Air Falcon 2000 Aircrafts and Taj yachts

• Taj Sats Air Catering• Taj Wellington Mews

Luxury Residences 80 Services Appts.

Associates & JVs• Budget Hotels Ginger in

smaller towns and cities (Targeting Low & Middle Income Group Tourists)

• The Taj Spas• Overseas Markets

through JVs & Acquisitions.

STRENGTHS1. 75 properties in 40 locations across India and 18 international hotels.2. Its effective and efficient management techniques and staff.3. The various initiatives taken like; rollout of Customer Feedback System, Tata Business Excellence Model, IT initiatives, Ginger hotels etc

WEAKNESS1. Its huge competitors like Oberoi, Leela, Oriental, ITC etc2. Its very costly for the Indians to afford the tariffs and service charges set by Taj hotels.need a lot of investment3. As a popular group, it is always in the eyes of the terrorists,4. Lack of Skilled Labour

OPPORTUNITY1. Tourism Sector leading to rapid growth in markets in India,2. Rapid expansion in both International and Domestic destinations, with top-of-the-line Luxury, Leisure and Business properties3. Meeting growing demand in the budget and mid-market segments.

THREATS1. Mainly to the markets in which the Group operates and general factors related to the tourism industry2. Growing presence of international hospitality chains competing in the Luxury and Business segments, to meet excess demand situation.3. Appreciating Indian Rupee vis-à-vis the US Dollar4. Slowdown of international demand resulting in reduction of revenues.

Change in Business Model• Tata group has seen major restructuring last 15

years and thus IHCL.• Shift to Lower capital employment strategy• Expanding through Management contracts &

JVs.• Reduced Manpower to emerge as a lean

Organization• Selling off Surplus Land and assets for

increasing capital• JV with GVK group in 25.5:74.5 ratio increased

Market share to 74% and improved market share and bargaining power.

Key Initiatives

• Shifting towards ‘Assets-Light’ Model to focus more in hospitality

• Restructuring its Property portfolio to fit into premium image, which will release cash.

• Reduction in staff, selling surplus lands and renovating lead properties.

• Restructuring Global Operations to reduce debt.

IHCL VISION

“ To Embrace talent and harness expertise to leverage standards of excellence in the art of

Hospitality to grow our international presence, increase domestic dominance and

create value for all stakeholders”Aims to have 20000 rooms, in 25 major

destinations around the world, with a group turnover of USD 2 billion and 33% share from international operations by 2010.

CORE VALUES

• Integrity & Respect• Passion for Excellence• Exceed Expectations• Innovation• Sense of Urgency & Accountability• Social Responsibility• Joy at Work

INDIAN HOSPITALITY MARKET

• As per the TTCR-2009 by the World Economic Forum, India is ranked 11th in the Asia Pacific region and 62nd overall, moving up three places on the list of the world's attractive destinations

• The India travel and tourism industry ranked 5th in the long-term (10-year) growth and is expected to be the second largest employer in the world by 2019.

• 'Hotels in India' have supply of 100,000 rooms.• 4.4 million tourists visited India last year and at current trend,

demand will soar to 10 million in 2010 - to accommodate 350 million domestic travelers.

• 'Hotels in India' has a shortage of 150,000 rooms• Room rates are most likely to rise 25% annually and occupancy to

rise by 80%, over the next two years.

22%

12%

8%

14%

7%

4%

33%

Indian Luxury Hotels Market Share 2009

IHCL (TAJ Hotels)EIH (Oberoi Group)Leela HotelsITC Welcome group HotelsAsian Hotels (Hyatt Group)Bharat Hotels (Lalit Hotels)Others

Entry Models for Hotels in India

• Wholly Owned Subsidiaries• Acquisitions• Joint Ventures• Licensing & Franchising

Other Aspects in Indian Scenario

• Lack of Skilled labour• Corruption• Internal SecurityPerformance of Competitors based on Key

Success Factors• Financial Strength• Strong Brand• Customer Relationship

Global Alliances & JVs

• 2005 – The Pierre, NY, Manhattan (44 Storied Hotel + 52 Suites & full serviced Appts)

• Strategic Marketing Alliance with Shilla Hotels in Korea, Raffles Hotels & Resorts and CC Africa (now ‘&beyond Africa’).

• Secured Management Contracts in Dubai, Malaysia & Bhutan.

Global Acquisitions

• 2006 – Ritz-Carlton Hotel, Boston (273 Rooms) ($107Mn)

• 2007 – Campton Place, San Francisco (110 Rooms) ($ 58Mn)

• 2005 – W- Bay, Sydney, (100 Rooms).

Vertical Alliances• Marketing Alliances – Silver sea Cruises• Current Partnership –

– BMI (British Midland) Diamond Club– British Airways (Exec. Club)– Cathay Pacific Air (Asia Miles)– Delta Airlines (Sky miles)– Gulf Air (Frequent Flyer)– Lufthansa (Miles & More)– Singapore Air (Kris Flyers)– Virgin Atlantic (Flying Club)

Affiliates – Citibank & American Express

Vertical Internal Development

• Taj Air – A luxury Private jet operation with State-of-the-Art Falcon 2000 aircrafts designed by Dassault Aviation Fr.

• Taj Yachts – Two 3 bedroom luxury Yachts in Mumbai & Kochi.

• Taj Luxury Residents• Taj SATS (air catering)• Inditravels (Travel services)

Horizontal Acquisitions & JVs

• The Falaknuma Palace 80 rooms Heritage Hotel (on Lease for 99 years)

• Alliances with GVK group in Hyderabad.(Taj Krishna & Taj residency)

Horizontal Internal Developments

• Ginger Hotels • Jiva Spas • Luxury ResidentsAll these Internal Developments

are to de-risk its business by innovation

Is IHCL an Excelling Organization?

• Innovations & Entrepreneurship• Consistency in performance• Strong Value System• Strong Customer Orientation• Market Leadership• Strong Growth – Domestically &

Internationally• Partnerships & Networking

Conclusion

By the study we can conclude that IHCL, inspite of various downstream factors, has developed itself and by constantly reducing its weaknesses and threats has emerged as the market leader. Their Business strategy talks of their core values and ethics inculcated in their management.