Jul 25, 2023
By: Katya Naidu
ITC, which is best known for its tobacco and FMCG businesses, had started its hotel business in 1975 by opening a luxury hotel in Chennai. It’s now being spun off into a new entity.
Credit: BCCL
After the demerger, the parent company will hold 40 percent stake in the hotels business, and the rest will be held by shareholders. More details will be revealed in mid-August.
Credit: BCCL
ITC has 120 properties with over 11,600 keys across luxury, premium and budget segments, in over 70 locations.
Credit: BCCL
Tatas-owned Indian Hotels is almost twice as big with over 31,000 rooms across 260 properties spread over 125 locations.
Credit: Pixabay
ITC Hotels contributed 3.7 percent to ITC’s gross sales in FY23. The business’ contribution to earnings interest and tax is at 2.3 percent as per Centrum Broking.
Credit: Pixabay
Hotels require a lot of investments and ITC has been ploughing in money into building properties. Around 20 percent of ITC’s capex went into the hotels business in FY23.
Credit: Pixabay
The hotel business of ITC has been growing fast after the pandemic. In FY23, hotel segment revenue doubled over FY22 and stood at 1.4x of pre-pandemic levels.
Credit: BCCL
Its margins expanded by over 930 basis points as compared to the pre-pandemic period of FY20.
Credit: Pixabay
ITC Hotels has properties under brands like ‘ITC hotels’, ‘Mementos’, Welcomhotel, Storii, Fortune and WelcomHeritage.
Credit: BCCL