Mumbai: Indian Hotels Co Ltd, owner of the Taj luxury chain, plans to selectively expand across the globe but would have to improve its profit margins further, chairman Ratan Tata said on Thursday.
“The company proposes to continue its expansion plans on a selective basis for both business and leisure globally, so that we can build the brand on a global basis,” Tata said.
Tata, who heads the salt-to-software Tata Group, India’s oldest conglomerate, was addressing shareholders of Indian Hotels during its annual general meeting. (AGM).
He is set to retire by end 2012 and the group has launched the search for a successor to a business empire ranging from salt and steel, to hotels, cars and software.
The Taj group at present has 104 hotels across the globe, including the budget hotel chain ‘Ginger’.
Indian Hotel’s firm’s April-June net profit plunged to Rs3.33 crore from Rs16.44 crore last year.
The firm is restoring the property and hopes to reopen the renovated wing by the middle of August 2010, Tata said.
Indian Hotels has said it is looking to increase its room rates by September or October this year, its first hike after almost two years and looking to add close to 1,500 new rooms in FY11 across 13 hotels in India and South Africa.
Tata said he was upbeat about the growth prospects about the Indian hotel and tourism industry which has seen a revival since October 2009.
India’s hotel and tourism industry is currently recovering from a near two-year economic slow-down worsened by a militant attack in November 2008 on Indian Hotels’ Taj Mahala Hotel and EIH owned Trident-Oberoi in southern Mumbai.
India requires investments worth 600 billion rupees over the next five years to cope with the unmet demand for about 150,000 rooms, according to FICCI-Evalueserve.
Shares of the firm ended down 3.21% at Rs96.55 in a weak Mumbai market.