ITC plans to sign management contracts to spread its hotel biz overseas

ITC is keen to sign management contracts to spread out its hotel business overseas. The first overseas hotel of the conglomerate is expected in Colombo, the capital of Sri Lanka. Talking to the media, the ITC chairman hinted that it has received a few expressions of interest (EoI) for managing overseas hospitality properties in the pre-Covid-19 period.

He adds, “Due to this pandemic, we have not worked on these proposals. But after the pandemic, it may be persuaded. On those tourist destinations, footfalls have also gone down.”

The FMCG-to-hotel-to-tobacco major has been adopted an asset-right strategy for hotel business while simultaneously leveraging ITC’s properties to accelerate growth. Now, there is a lot of traction for management of properties and negotiations are on for five-seven such properties.

The company states, “The business is witnessing a growing interest among property owners to align with its iconic brands resulting in healthy generation of leads and pipeline for management contracts. While new signings/openings were adversely impacted during the year due to the pandemic, the business is confident of bouncing back as the situation normalises.”

Nakul Anand, executive director, ITC states that more and more managed properties would be added in the next three-four years. He continues, “Now there are 12 hotels under the Welcom brand which will go up to 34-35 in the next three-four years.”

At present, ITC has nearly 100 properties in its portfolio. The property owned by the company is almost 60 percent now. However, the conglomerate is now planning to reverse the ratio between owned and managed properties from the current level of 60:40 to 40:60 ratio going forward.

The hotel segment revenue of ITC is 3,369 crore with a profit of 190 crore. Now, 14 hotels under ITC Hotels brand, 35 under Fortune brand and 12 under Welcom brand besides a few under Welcom Heritage brand. Recently, it has revealed that a new boutique brand Storii. Initially, it wants to have four-five hotels under this brand.