ITC plans to expand its hotel business internationally, beginning with neighbouring countries and West Asia, its Chairman and Managing Director, Sanjiv Puri, said.
The cigarettes-to-consumer goods conglomerate has demerged its hotels division, and the new company will be listed on the stock exchange in the next few weeks. While the exact date of ITC Hotels Ltd's listing has not yet been announced, Puri indicated that it would occur "in the next few weeks".
India's most-valued consumer company, which sells a wide range of goods from cigarettes to paper, currently operates 140 hotels, almost all of them in India.
ITC's shareholders will own 60% of the new unit, with the parent company retaining the remaining share.
"As far as overseas expansion is concerned, we are starting to venture beyond India. While we have been India-centric, we now have a hotel in Colombo, one in Nepal, and another one signed in Nepal. Over time, we will expand into neighbouring markets, especially West Asia, and potentially explore other interesting opportunities," Puri said in an interview.
ITC aims to grow its portfolio from 140 to over 200 hotels across India. Previously operating as a division of the larger ITC conglomerate, the hotel business will now have operational autonomy following the demerger.
Currently, ITC Hotels boasts 140 properties with 13,000 rooms, 45% of which are owned and 55% operated through management contracts. The company is increasingly focusing on an asset-light growth model, with an emphasis on management agreements to expand its market presence.
Puri stated that the overseas expansion would follow a managed and franchisee model.
Regarding competition from established foreign players, Puri highlighted ITC's unique proposition, including its hotels being a favourite of foreign dignitaries visiting India. He said, "We have iconic cuisine that is globally recognised. I am told many foreigners who visit India first book a table at Bukhara (restaurant at ITC Maurya in New Delhi). Our iconic cuisine and service standards set us apart."
Additionally, ITC hotels stand out for their green credentials, with all properties meeting emissions targets below the Paris 2030 agreement. The world’s first 12 LEED-certified net-zero carbon hotels and the first five net-zero water hotels are all ITC hotels.
"Consumers are increasingly opting for greener companies and products. These differentiators will help us compete successfully," Puri noted.
Operating under six distinct brands – ITC Hotels, Fortune, Mementos, Storii, WelcomHeritage, and Welcomhotel – the group opened its first hotel in Sri Lanka in April last year.
When asked about the valuations the demerged entity might command, Puri emphasised that the management's role is to run the business well, make it contemporary and future-ready, and create value, leaving the market to determine the valuation.
"Our role is to create value and make the business competitive," he said, adding that the listing would likely happen within "the next few weeks, or at most, three to four weeks."
Regarding expansion within India, Puri explained that ITC had recently redefined its strategy for hotels, shifting from a more asset-heavy model to a more asset-light strategy. "With this strategy, we are now building our hotel expansion," he said, noting the addition of two new brands – Mementos by ITC and Storii.
ITC now has a portfolio with hotels at different price points, including luxury options like ITC Hotels and Mementos by ITC, leisure resorts like Mementos, five-star offerings under Welcomhotel, boutique properties like Storii, business hotels under Fortune, and heritage properties under WelcomeHeritage.
Puri outlined that the company plans to grow across its portfolio, aiming for a richer profile in the long run, with an increasing percentage of upper-upscale rooms. "In the last 24 months, we have opened 26 hotels, and our target is 200. I have told the team that it must reach at least 200," he concluded.
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