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It is no surprise that IHCL is expanding its airport hotel portfolio. These hotels are becoming increasingly popular, especially among business travelers. Imagine saving time in an environment where traffic is often heavy: You get off, grab your bag and reach your hotel within minutes. Now, who wouldn’t want that?

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Indian Hotels Company (IHCL), the parent brand behind Taj Hotels, is looking at airport properties as a key growth area. In its latest move, IHCL invested INR 500 million ($6 million) in its subsidiary Zarrenstar Hospitality due to a rights issue.

In March, IHCL had invested INR 350 million ($4.2 million) in Zarrenstar Hospitality.

In this way, IHCL will retain full ownership of Zarrenstar. “The funds will be used to develop a hotel near Cochin International Airport,” IHCL said in a statement to the stock exchange.

Scheduled to open in November, the 112-room property under the Taj brand represents an estimated INR 1 billion ($12 million) investment aimed at capturing the airport’s high-traffic market.

“We are opening Taj at Cochin International Airport in November this year,” Puneet Chhatwal, managing director and CEO of IHCL, had said during the earnings call in July.

According to IHCL stock exchange filings, Zarrenstar recorded a turnover of INR 5.5 million ($65,416) as of March 31, 2024.

IHCL’s Growing Airport Real Estate Portfolio

In an earlier earnings call, IHCL’s then chief financial officer Giridhar Sanjeevi said airport properties were a very strong value proposition, adding that the company’s plans for Cochin Airport, Mumbai Airport and other locations would continue.

Besides Cohin’s Taj property, IHCL has a mixed development project at Bangalore Airport comprising Vivanta and Ginger, totaling 750 rooms; has also signed and announced a 300-room Ginger Mopa Airport in Goa. In August, IHCL also introduced its latest addition, Ginger Coimbatore Airport.

In November last year, IHCL opened the 371-Key Ginger Mumbai Airport hotel.

“Ginger grew 45% year-on-year, driven by the excellent performance of its flagship Ginger Mumbai Airport Hotel,” Chhatwal said while announcing first quarter results for the period ending June 30, 2024.

London-based hotel group Yotel also plans to enter the Indian market with hotels near some of India’s busiest airports, the CEO said. Hubert Viriot told Times of India earlier this year.

How IHCL Expands Its Portfolio and Market Presence?

IHCL has grown its presence through a series of strategic expansions and Zarrenstar Hospitality has been added to this expanding portfolio. In the first quarter of fiscal 2025, IHCL signed contracts with 16 hotels and opened six new properties. Thanks to this, the hotel company has crossed the milestone of more than 325 hotels in its portfolio.

The group is also preparing for the launch. rebranded Gateway As a full-service hotel in the luxury and upscale segment. IHCL, which consists of 15 hotels, has an ambitious target of reaching 100 Gateway hotels by 2030.

IHCL on Monday also announced the opening of 83-key Yarkay, Thimphu — IHCL SeleQtions in Bhutan.

Chhatwal said the Bhutan opening is designed to meet the growing demand for experiential travel: “This opening is in line with our vision to increase our presence in leading gateway destinations, ensuring travel tours in the region attract global travellers.”

Not Just Hotels

Beyond hotels, IHCL has also announced its entry into the branded residential market. First Taj branded residences to open in Chennai.

“This is a very lucrative market segment in India; today its market capitalization exceeds INR 220 billion ($2.6 billion) and is growing in double digits on an annual basis. This helps IHCL diversify its revenue streams and leverage Taj’s strong brand equity,” Chhatwal said in the latest earnings call.

IHCL’s growth strategy through all these smart acquisitions and diversification seems to be paying off in a big way. In the first quarter of fiscal 2025, the company recorded its ninth consecutive quarterly record performance, with corporate revenue exceeding INR 30 billion ($360 million), up 7% from last year.