Puneet Chhatwal, MD and CEO of Indian Hotels Company shared his views on opportunities in the Indian market, besides discussing the road ahead for the Taj Group. He expressed hope for better revenue generation opportunities emanating from secondary and tertiary cities in the near future. He was in conversation with Abha Bakaya at the Global Hospitality Conclave 2018.

Taj an iconic brand, conscious of the legacy

After having spent nearly thirty years in Europe and the United States of America, Puneet Chhatwal is back in India as the head of the Indian Hotels Company. He evaded questions on group’s business strategy moving ahead, calling it “too soon to comment”, citing his recent induction as the MD and CEO. He suggested that the group was operating in a ‘glocalised’ world, and he was working “in close coordination” with group chairman Natarajan Chandrasekaran to take the company forward.

In an honest admission, he concurred that he was filling in big shoes, following the likes of the legendary Ajit Kerkar and R.K Krishna Kumar. “It is good to be nervous and have butterflies in your stomach. It keeps you focussed,” he said.

He called the Taj one of the two most recognisable Indian brands. The other being ‘Gandhi’. He asserted that Taj Hotels was equally iconic as the Oberoi, if not more. He revealed that Indian Hotels Company was a market leader in flight catering service and accounted for 38 percent of the domestic market share.

He shared his views on the transformation in the market in the past three decades, noting that the sense of Indian values and culture had become stronger, but population was taking a toll on the country’s environment and traffic. “I had the worst experience of traffic in Bengaluru. Apart from that it is all good,” he quipped.

Sharing his thoughts on joining the group, he admitted that “he had entered the fray at an interesting time.” Puneet Chhatwal reckoned that Taj Hotels was not short on resources or capital, but “just needed to do the right things.” He noted that he was not averse to taking calculated risks, if the risk was right. “I do not believe in asset-light strategy but growth must be strategic in nature,” he detailed.

Metros still key to revenue generation, but tier-2 and tier-3 cities promising prospects

He observed that despite the overall growth in the hospitality industry, still, only a handful of key markets were generating bulk of the revenue for hotels. “Irrespective of the growth in tier-2 and tier-3 cities, only 5-7 markets are key in terms of generating revenue. Mumbai, Delhi and NCR, Bengaluru, Hyderabad and Goa (for us), to name them,” he said.

He expressed confidence on the business potential in secondary and tertiary markets in the coming years, and said that “there are opportunities that need to be looked at.” He also mentioned that the opportunity with the Ginger brand of hotels, in the Indian subcontinent, was huge.

Domestic footfalls to drive business

Giving his views on excessive focus on foreign footfalls in to India to shore up businesses, he iterated that there was a “lot of movement in the domestic segment with numerous FMCGs propping up.” “Along with the aviation sector, hotel industry is well-poised to capitalize on that growth,” he said.

He batted for inculcating a culture of collaboration, instead of competition, suggesting that “India’s large population was one of the reasons for instilling such a fierce sense of competition.” He argued that Indian hotels could rule unchartered territories if they agreed to collaborate than to compete.

Pricing remains a concern

Puneet Chhatwal was effusive in his praise for quintessentially Indian offerings, namely hospitality and cuisines, but added that “there was a long way to go on the pricing front.” He was vocal in noting that hotels must not tom-tom high occupancy rates as long as their ability to charge prices commensurate to service being offered remained low. “I see that as a very important factor,” he said.

Global overview helped learn the tricks of the trade

Chhatwal’s sweeping engagement with global hospitality brands came in a handful as he compared the ethos between European and American styles of hotel management. “I got trained in Europe with Frankfurt-headquartered Steigenberger Hotel group which gave me a fantastic base to observe the European style of management,” he said. He added that he learned the tricks of the American style of marketing, working with the Carlson group.

He reflected on challenges ahead and pointed out that the rise of nationalistic governments, the world over, was going to impact businesses. “One should be able to adapt to changing times,” he said.