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Indian Hotels reboots by going asset-light

Last month, Tata Sons-promoted Indian Hotels Company, or IHCL, announced its exit from a property in Jaisalmer, the Gateway, which it had managed for the last several years. This was the hotel chain's third exit in four months after it ended management contracts for Gateway properties in Ahmedabad and Jodhpur.


The company, which operates hotels under the Taj, Vivanta by Taj and Gateway brands, has also checked out of three Taj properties in the last two years. While IHCL has been adding new properties every year, this attrition has not escaped the attention of analysts and rivals. IHCL did not provide reasons for moving out of the Jaisalmer, Ahmedabad and Jodhpur properties, but speculation is rife that it could be an effort to shore up the company's bottom-line.

 With stuck investments, churn in senior management, no profits since 2011-12 (annual and consolidated), and a huge debt burden of over Rs 5,000 crore on its books, the 114-year-old IHCL needs to do all it can to bounce back at a time when competition is increasing by the day - the Marriott-Starwood combine is set to add over 70 new hotels across segments in the next five years in the country.