India Tourism Development Corporation (ITDC) was established in 1966 as an autonomous public sector corporation to develop, promote and provide a complete package of tourism related services. Presently, ITDC has a network of 16 hotel properties across the country under the name of The Ashok Group of Hotels. The Corporation has diversified into new avenues/innovative services like Full-Fledged Money Changer (FFMC) services, engineering related consultancy services, travel and tourism, Event and Conference management, Ashok Institute of Hospitality & Tourism Management of the Corporation that imparts training and education in the field of tourism and hospitality, aviation services etc.
Mr. Rajiv Makin, Director, Commercial and Marketing, ITDC is overseeing the preparations for the upcoming Commonwealth Games. ITDC has begun its preparations in full flow. Hotel Ashok and Samrat would be the official ?Family Hotels? for the Games. Broadly, the main objectives of ITDC include providing innovative, dependable and value for money solutions to the needs of tourism development and engineering industry including providing consultancy and project implementation.
Replying to Anil Mascarenhas of India Infoline, Rajiv Makin says, ?ITDC would be raising Rs1.40bn for hotel renovations.?
Give us a brief overview of the Indian hotel industry. To what extent has the slowdown impacted your business?The Indian Hotel industry is at US$17bn currently. Around 30% of this sector falls in the organized category. An additional 20 international brands are expected to come to India by 2011.
The slowdown has definitely had a major impact on the entire industry. However, The Ashok Group caters to domestic tourism as well, which has been less affected in comparison to in-bound business. As a matter of fact, we are still making substantial profits with no dip whatsoever. Rather, ITDC gave a dividend cheque of Rs125mn to the Minister of Tourism Kumari Selja for FY08.
Besides hotels, which are the other areas you have ventured into?ITDC has also ventured in other areas and has divisions for Duty Free Shops, Travel and Tourism, Creatives, Consultancy and Engineering services, Conference and Event Management and Ashok Institute of Hospitality and Tourism Management.
What are some of the initiatives by ITDC keeping in mind the Commonwealth Games?India Tourism Development Corporation (ITDC) being a state-owned corporation is an autonomous public sector corporation set up to develop, promote and provide a complete package of tourism-related services.
ITDC has 16 hotel properties across India with three prime properties in Delhi. For the upcoming Commonwealth Games, ITDC has begun its preparations in full flow. Hotel Ashok and Samrat would be the official ?Family Hotels? for the Games and Hotel Janpath will act as the Media hotel. Renovation and upgradation work is happening in each of the three hotels.
Ashok will be given a completely new look with 228 rooms and 30 suites being completely revamped along with the main lobby and convention halls. Also, a multi-level three tier underground parking is also being planned.
Hotel Samrat will also undergo major changes. The standard room of Samrat will brought at par with that of Ashok and both will jointly act as the Family Hotels. Also, 100 rooms and the lobby would be renovated. Besides, six famous designers will be designing the suites in the hotel according to their own creativity and aesthetics. A new franchise restaurant will also be coming up.
Hotel Janpath will also be seen in a whole new look. Each room in the hotel will soon be revamped to the best possible luxury with 36 chandeliers being imported from Czech Republic. The shopping arcade in the hotel will also be revamped. Major international fashion brands will soon open shop there. In terms of restaurants the hotel, which recently saw the launch of the Rohit Bal designed Cibo, will see a new Mediterranean restaurant coming up as well.
ITDC would also be responsible for training support staff like drivers, taxi-drivers, staff at metro stations, staff at tourist spots, DTC staff etc to prepare them to handle the international clientele. ITDC will also be in charge of furnishing and managing 5000 DDA flats to meet with 3-star hotel standards that would be given on rent to the tourists for accommodation during Commonwealth Games.
What kind of revenues are you expecting from various segments? During the period of the Commonwealth Games, ITDC is expected to make a profit of Rs800mn to Rs1bn. Out of this, Rs300mn could be attributed to catering services, Rs400mn to the Hotels division and Rs200mn to the travel agency division.
What is the amount being spent on various training programs?ITDC trains its staff across all the divisions regularly, however with CWG round the corner; the training is on full swing. The training entails many modules depending on the level of employee. However to pinpoint our prime focus through these trainings is to give impeccable service to the international visitors coming in during the Commonwealth Games. The cost of these training programs is nil as all these trainings are in-house.
You have launched a major upgradation drive for hotel properties. What is the capex for the same? How is it being funded?ITDC is upgrading its properties throughout the country. This massive expansion is entails a sum of Rs2bn divided among various properties.
ITDC would be raising an amount of Rs1.40bn for the renovation through preferential allotment of shares to the government. The ITDC Board has approved preferential allotment of 1,82,50,000 shares at a price of Rs40 per share to its promoters.
We expect all the renovation and revamping done to give the hotels a complete new look to be successful. Hopefully, the guests will like the hotel ambience and this should have a positive impact on sales.
Comment on your marketing initiativesITDC has been regularly taking part in various travel marts and exhibitions both international as well as domestic to tap various markets both in India and abroad. Also, ITDC has been organizing various Indian food festivals abroad. Some time back, ITDC held a festival in Madrid, Spain. A festival is currently on in Russia and next year we would see a similar festival in China.
What kind of expectations do you have from the budget?We are hoping that there is some lowering of the luxury tax. It should not be more than 5%.
What are the opportunities and challenges for the industry?Keeping in mind the present scenario where cost cutting is being done at a huge rate, the biggest challenge for any hotel, perhaps, is to make sure that the cost incurred are not more than the profits earned. The possible opportunities for hotels lay in the domestic as well as local guest traffic, which should be tapped to the fullest.
Also, Swine Flu can act as a major deterrent for profits if it expands to a large extent. Since airlines are the major carriers of this, people would immediately stop traveling thereby hampering the business of hotels across the globe.
Any plans to dilute stake?ITDC has no plans to dilute stakes.
Your message to shareholdersTourism as a sector will continue growing. Due to the present economic scenario and Swine Flu there have been losses, but these are all mere roadblocks. The Tourism industry is set for further growth and will continue to expand.