Indian Hotels Co. Ltd. · NSE:INDHOTEL
Indian Hotels — The Indian Hotels Company — Investor Day (February 2018)
70 slides from Indian Hotels's investor day presentation, Feb 16, 2018
Slide 1: Aspiration 2022
ASPIRATION 2022
Slide 2: Puneet Chhatwal, Managing Director & CEO
PUNEET CHHATWAL Managing Director & Chief Executive Officer Building The Most Iconic and Profitable Hospitality Company Slide No: 2
Slide 3: Agenda
AGENDA • External Environment • Aspiration 2022 • Portfolio Growth • Operational Excellence • Revenue Optimization • Superior Financials Slide No: 3
Slide 4: Improving RevPAR trends in the Domestic Market
Improving RevPAR trends in the Domestic Market ▪ Increase in Occupancies leading to gradual increase in RevPARs. ▪ Demand growth outpacing supply growth for the past 3 years. ▪ 2007/08 peak RevPARs yet to be achieved. ▪ Domestic chains lacking segmental depth. Source: HVS Trends and Opportunities, H
Slide 5: Trend of increase in Inventory expected to continue
Trend of increase in Inventory expected to continue Upscale and Midscale dominate future supply IHCL Market Share under pressure Source: Horwath HTL Slide No: 5
Slide 6: IHCL at an inflection point for transformational growth
IHCL at an inflection point for transformational growth Where we were Where we are 4,123 4,076 ₹ / crores 3,013 2,601 1,875 249 370 355 (63) (231) 2005/06 2006/07 2007/08 2015/16 2016/17 Revenue PAT Legacy Balance Sheet and P&L issues are behind us Slide No: 6
Slide 7: Agenda
AGENDA • External Environment • Aspiration 2022 • Portfolio Growth • Operational Excellence • Revenue Optimization • Superior Financials Slide No: 7
Slide 8: Purpose, Aspiration, Initiatives
Purpose Creating value by operating Best-in-class portfolio of hospitality brands in India and select overseas destinations Aspiration Expressed through Culture, Commerce & Connectedness Initiatives Execution through Re-structure, Re-engineer and Re-imagine Slide No: 8
Slide 9: Aspiration 2022
Aspiration 2022 Culture Commerce Connectedness ▪ One IHCL, One Tata ▪ Market Leader by inventory Internal ▪ Balanced Organization ▪ Emotional connect with all in India - relevant segments ▪ Employer of Choice stakeholders ▪ EBITDA Margin of 25% ▪ Driven by Performance and ▪ Stock to outperform Indic
Slide 10: Strategic Initiatives
Strategic Initiatives Re-structure Re-engineer Re-imagine ▪ Scale up Inventory ▪ Expand Margins ▪ Manoeuvre Excellence ▪ Simplify Holding Structure ▪ Embrace Technology ▪ Manage Brandscape ▪ Sell Non Core Assets ▪ Engage People ▪ Multiply Portfolio Slide No: 10
Slide 11: Brandscape – Underlying theme
Brandscape – Underlying theme ▪ Address Diverse Customer segments and price points ▪ Align Brandscape to dominate High Growth Segments ▪ Adapt Branding for ‘Profitability & Scale’ Slide No: 11
Slide 12: Brandscape: Palaces Leisure Business
Brandscape Palaces Leisure Business Slide No: 12
Slide 13: IHCL Aspiration 2022
IHCL Aspiration 2022 Iconic and Profitable Hospitality Company Re-structure Scale, Simplify, Re-engineer Sell Re-imagine Margins, Technology, Service, Brandscape, People Portfolio Culture Strong Brand Equity High Customer Engagement Market Leaders in Leisure & Pan-India Footprint Palaces Segment INT
Slide 14: Agenda
AGENDA • External Environment • Aspiration 2022 • Portfolio Growth • Operational Excellence • Revenue Optimization • Superior Financials Slide No: 14
Slide 15: Suma Venkatesh – Asset Smart Growth
SUMA VENKATESH Senior Vice President – Real Estate & Development Asset Smart Growth Slide No: 15
Slide 16: Our Portfolio
Our Portfolio Number of Hotels Inventory by Contract Inventory by Brand 16 22% 25% 25% 123 38% Domestic International Inventory – Total 16,992 Keys 14% 16% 84% 50% 26% Domestic International Holding Company Group Companies Mgmt Contracts Luxury Vivanta Gateway Ginger *Inventory as of 31st January 20
Slide 17: SMART
S M A R T Strategic Margin Asset Relationships Tracking Enhancement Management Slide No: 17
Slide 18: Development approach across brands
Development approach across brands Management Contract with Sliver Pure Pure Investment Management Management Contract Contract Operating Lease / Ownership Management Pure Pure Contract with Sliver Management Management Investment Contract Contract Operating Lease / Ownership Operating Operating Lea
Slide 19: Domestic Market – Focus Areas
Domestic Market – Focus Areas Taj Vivanta Ginger ▪ City Hotels: All key cities in ▪ City Hotels: Top 40 cities ▪ City Hotels: Top 80 cities the top 15 states by GDP (basis population, (basis population, ▪ Resorts: Established connectivity, commercial connectivity, commercial destinations with good a
Slide 20: Unlock value
Unlock value Unlock Value from Land Bank India Overall Land Bank: 759 acres Developable : 236 (31%) Monetize : 44 (6%) Hold : 480 (63%) Unlock Value by Developing Unutilized FSI Expand our existing properties to Leverage / Develop over 1 Million square feet of unutilized FSI Slide No: 20
Slide 21: International Expansion – Focus Areas
International Expansion – Focus Areas Customer Crossover Cities with large Indian Growth Markets Diaspora ▪ Target the growing, high ▪ The large Indian Diaspora in ▪ Certain markets like spending outbound tourists various markets such as Myanmar, Africa etc. are familiar with our brand Singapore, Th
Slide 22: Asset Management – Portfolio Health
Asset Management – Portfolio Health Capital Allocation Contract Management ▪ Maintain market leadership with quality products ▪ Periodic review and study of contracts to extend tenure ▪ Prioritize investment in product renovation for areas of good performing hotels and cities with maximum returns ▪
Slide 23: Agenda
AGENDA • External Environment • Aspiration 2022 • Portfolio Growth • Operational Excellence • Revenue Optimization • Superior Financials Slide No: 23
Slide 24: Prabhat Verma – Operational Excellence
PRABHAT VERMA Senior Vice President - Operations Driving Operational Excellence & Delivering High Profit Margins Slide No: 24
Slide 25: Customer Needs and our Strengths
Customer Needs and our Strengths Palaces Leisure Business Primary Needs Primary Needs Primary Needs - Authenticity - Overall well being - Location - Memories of a life time - Relaxation and fun / family time - Efficiency, Safety and Hygiene - Need to collect experiences - Personalization Competitive
Slide 26: Preferred Choice for Heads of States, Celebrities and Dignitaries
Preferred Choice for Heads of States, Celebrities and Dignitaries Prime Minister of Israel Australian Prime Minister King Of Morocco German Chancellor Ivanka Trump & Bhutan King, Queen and Italian Prime Minister British Prime Minister Prime Minister Modi Young Prince Slide No: 26
Slide 27: Increase Topline, Increase Margin
Increase Margin Topline Enhancement Create a culture of Operational Excellence delivering high profit margins Guest Employee Satisfaction Engagement Slide No: 27
Slide 28: Increase Topline
Increase Topline • Legacy of strong relationships with corporates, travel trade, diplomatic missions Increase • Widespread Presence of sales offices Topline • Support and partnership from Tata Companies Maximize • Added Focus on digital marketing & revenue management Revenue opportunities • Leverage
Slide 29: Increase Topline – Pioneering Food and Beverage Experience
Increase Topline – Pioneering Food and Beverage Experience: • New Products and Cuisines Increase • Leveraging Iconic restaurants and celebrity chefs Topline • Collaborations with Renowned Chefs Enhancing • Authentic Regional Cuisine creating a sense of place F&B revenues • Taj Signature offerings •
Slide 30: Guest Experience
Guest Experience • Taj Culture and Tajness to be the bedrock of all experiences • Efficiency and consistency in delivering Product and Service Standards • Recognition and Personalization Experiences Guest Satisfaction Slide No: 30
Slide 31: Differentiators
Drivers of Guest Engagement Guest Well-Being 61 56 54 51 57 45 43 World class rooms and facilities 58 46 49 47 39 39 40 Industry Drivers Value for money 54 43 46 49 36 42 35 Sincere Care 62 48 56 44 51 50 40 Great dining experience 63 43 48 45 40 38 39 Memorable Experiences 63 49 52 43 47 43 44 Deta
Slide 32: Process Excellence
Process Excellence Process Enablers and Review Mechanism • Key Process Indicators (KPIs) to ensure consistency in delivery of standards of service • Central Information System to enable recognition and personalisation Process Excellence • Robust Customer Feedback System • Annual Audits on Services,
Slide 33: Re-Engineer Costs – Enhance Margins
Re-Engineer Costs – Enhance Margins Focus Areas: Margin • Procurements - Reduce Imports and Carbon Enhancement footprint • Energy costs - Renewal/ Solar Power Initiatives Efficient Cost management • Payroll Costs - Optimized Organization structure and shared services • Admin and General Expenses - R
Slide 34: Employee Engagement – Focus Areas
Focus Areas: • Talent Pipeline • Developing General Manager Talent Committed • Career and Succession Planning and Motivated Workforce • Engagement & Employer of Choice Employee Engagement Slide No: 34
Slide 35: Brief Overview of Talent at IHCL
Brief Overview of Talent at IHCL Inverting the Pyramid 26,000 82.4% Total Number of Focus on Frontline Recruitment and Development Managerial Associates Retention Hotelier Development Program (HDP) – 18 Months 35 1:2 Average Age Rooms : Ratio Supervisory Hotel Operations Training Program (HOT) – 12
Slide 36: General Management Development Program
General Management Development Program Building Capability for Long Term Business Impact Action Learning Projects : resolving real-time business challenges and providing strong ROI Guest & Employee Shared Services Heritage Management Financial Management Gender Diversity Sustainability centricity Sl
Slide 37: Focus on Career and Development
Focus on Career and Development • Career and Succession Planning process enables us to put focus on development. - Captures aspirations - Allows career planning - Encourages succession planning & - Creates a culture of coaching and mentoring in the organization Slide No: 37
Slide 38: Employer of choice
Emphasis on Engaged Talent is sustaining us as the “Employer of choice” A W A Six-time winner India’s top 50 People Capital Index R D Taj received Gallup Great Workplace Award in 2017 for the 6th time S Business Today Award for Top Quartile company in the Gallup Global Database Best Companies to Wor
Slide 39: Increase Topline, Increase Margin
Increase Margin Topline Enhancement Create a culture of Operational Excellence delivering high profit margins Guest Employee Satisfaction Engagement Slide No: 39
Slide 40: Agenda
AGENDA • External Environment • Aspiration 2022 • Portfolio Growth • Operational Excellence • Revenue Optimization • Superior Financials Slide No: 40
Slide 41: Chinmai Sharma – Chief Revenue Officer
CHINMAI SHARMA Chief Revenue Officer Driving Sales, Optimizing Revenue and Staying Commercially Focused Slide No: 41
Slide 42: Brands Of 2016
Brand Recall 2016 1 2 3 BREAKAWAY 4 Brands 5 6 Of 2016 7 8 9 10 Source: BAV 2013, 2016 | ALL ADULTS Slide No: 42
Slide 43: Brandscape: Palaces Leisure Business
Brandscape Palaces Leisure Business Slide No: 43
Slide 44: Optimizing Direct Channels
Optimizing Direct Channels Slide No: 44
Slide 45: The Digital Story
The Digital Story Room Nights & Revenue Growth (Apr–Dec 2017) Room Nights Revenue 26% 19% YoY YoY Key Initiatives Unified PMS Roll-Out CRM & Analytics Mobile App Slide No: 45
Slide 46: Taj.Live: Social Media Engagement
Taj.Live: Social Media Engagement Tata Brand Awards Social Application Tata Innovista Best Digital Platform of the Year National Finalist Slide No: 46
Slide 47: Slide 47
Slide 48: Taj Wedding Studio, Taj Holidays
Taj Wedding Studio Taj Holidays Slide No: 48
Slide 49: Building Loyalty
Building Loyalty Taj InnerCircle Program – High Enrolment, Engagement, Revenue & Satisfaction since program re-launch Enrolment Active Members Revenue Customer Satisfaction 70% 120% 50% 100% 1/3rd Slide No: 49
Slide 50: Loyalty Awards 2018
Loyalty Awards 2018 Best Loyalty Partnership “BIGGEST DISRUPTION BY 2 ASIAN BRANDS”: Skift.com Slide No: 50
Slide 51: Strong Sales Offices Network and Healthy Geo Sources
Strong Sales Offices Network and Healthy Geo Sources UK Sales Office: London USA Sales Offices: NY, LA, SF UAE Sales Office: Dubai India Sales Offices in all key cities Australia Sales Office: Sydney Slide No: 51
Slide 52: Building Digital Capability…
Building Digital Capability… Re-launched tajhotels.com Highlights: 1. Rich UI & UX 2. Leveraging cloud services 3. Agile campaign roll-out 4. Rich media Results: 1. Revenue up by 27% YOY, since 2016 2. 189% increase in Mobile web revenue 3. 12 Million+ unique web visitors 4. Several Design awards wo
Slide 53: Building Digital Capability…
Building Digital Capability… State of the art command centre for social listening Re-launched tajhotels.com and response management Launched Taj.live Slide No: 53
Slide 54: Building Digital Capability…
Building Digital Capability… Re-launched tajhotels.com Launched Taj.live Launched the Taj Hybrid app Results: 1. 100K+ downloads since release 2. Generated over 4 crores in 12 months Slide No: 54
Slide 55: Building Digital Capability…
Building Digital Capability… Unique integrated table booking platform with decentralised channel management UI at hotels Re-launched tajhotels.com Launched Taj.live Launched the Taj Hybrid app Integrated Table Mgmt. System 1. Over 3,700 table reservations generated from online channels Slide No: 55
Slide 56: Building Digital Capability…
Building Digital Capability… Localized content to drive direct booking from source markets Re-launched tajhotels.com UK ENGLISH Launched Taj.live Launched the Taj Hybrid app Integrated Table Mgmt. System Avg Ticket size- INR 52,000+ Multi Lingual Websites Slide No: 56
Slide 57: Building Digital Capability…
Building Digital Capability… 2018/19 Customer Data Master Native mobile app Re-launch Loyalty Website with improved UI & UX Personalization, Single Sign-on & critical enhancements Central Reservation System Migration Slide No: 57
Slide 58: Optimizing Source and Segment Mix
Optimizing Source and Segment Mix Slide No: 58
Slide 59: Optimizing Source and Segment Mix
Optimizing Source and Segment Mix 79% 82% Direct Channels Transient Focus on Direct Channels Ideal Mix of Transient vs Groups Taj Website, Call Centre, Private GDS and Hotel Direct Higher Yield opportunity with Rev Mgmt & Analytics Slide No: 59
Slide 60: Agenda
AGENDA • External Environment • Aspiration 2022 • Portfolio Growth • Revenue Optimization • Operational Excellence • Superior Financials Slide No: 60
Slide 61: Giridhar Sanjeevi – Chief Financial Officer
GIRIDHAR SANJEEVI Chief Financial Officer Sustainable financial performance through margin enhancement, asset sweating and optimal capital structure Slide No: 61
Slide 62: We are a $1.2 billion revenue Group
We are a $ 1.2 billion revenue Group Indian Hotels Company Limited Domestic Air International Hotels Ginger Taj Group Hotels Catering Particulars Owned Managed Owned Managed Owned Managed Owned Owned Managed Total No. of Hotels 60 23 9 7 31 7 - 100 37 137 Inventory rooms 8,165 2,545 1,474 1,160 3,04
Slide 63: Driving Return on Equity
Driving Return on Equity (Net Profit to Equity) (Net Profit / Income) (Income / Assets) (Assets / Equity) Profit Margin Asset Sweating Capital Mix ▪ Drive Top line Growth – Taj, ▪ Drive New development pipeline ▪ Manage Interest and Financial Ginger, SATS ▪ Asset Smart approach Leverage ▪ Drive Marg
Slide 64: Aspiration 2022 – Margin Expansion
Aspiration 2022 – Margin Expansion Particulars Margin Improvement Revenue RevPAR Growth Other Operating Income 3 to 4 % Management Fee Income Incremental Income from New Inventory Costs Operational Payroll Procurements (Raw Materials, Stores & Supplies) Corporate Overheads 3 to 5% Admin and General
Slide 65: Financing Strategy to support growth while preserving Balance Sheet health
Financing Strategy to support growth while preserving Balance Sheet health ₹ /crores *Unaudited Slide No: 65
Slide 66: Cash Requirement
Approach to Funding Ginger Portfolio Special Acquisitions ▪ Ginger Growth requires support, from IHCL ▪ Special acquisitions needs to be looked at High and also from potential partners separately Cash Requirement Piem, OHL & other Associates Current IHCL Standalone Portfolio ▪ Other Taj Group Balanc
Slide 67: Opportunity to simplify IHCL Structure
Opportunity to simplify IHCL Structure Particulars (₹ / Crores) Turnover EBITDA Enterprise 7,095 1,252 IHCL Consolidated 4,065 665 % share of Enterprise 57% 53% IHCL Standalone 2,445 574 *All figures pertain to FY16/17 Slide No: 67
Slide 68: Making the Balance Sheet Smarter
Making the Balance Sheet Smarter • Current Net Assets Block – Rs. 6500 Crores • Opportunities of unlocking Value through sale & leaseback type mechanisms • Sea Rock Accelerating approvals, Asset structuring solutions • Monetise Non core Assets ITDC Shares Residential Apartments • Simplifying structu
Slide 69: IHCL Shareholding – Strong Institutional presence
IHCL Shareholding – Strong Institutional presence Individual Trusts Key Investors % Holding & Others, 13.2% Domestic Institutional Investors Foreign Life Insurance Corporation of India 8.4 Institutional Promoters, Investors, 15.8% 39.1% Reliance Mutual Fund 5.8 HDFC Mutual Fund 3.8 Domestic ICICI Pr
Slide 70: IHCL Aspiration 2022
IHCL Aspiration 2022 Iconic and Profitable Hospitality Company Re-structure Scale, Simplify, Re-engineer Sell Re-imagine Margins, Technology, Service, Brandscape, People Portfolio Culture Strong Brand Equity High Customer Engagement Market Leaders in Leisure & Pan-India Footprint Palaces Segment INT
The Indian Hotels Company — Investor Day (February 2018) on 6ix