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IHCL's Puneet Chhatwal: Defining hospitality 2.0

Puneet Chhatwal, the managing director and chief executive officer of Indian Hotels Co. Ltd talks about defining the core values of the group, the need to build a diversified brandscape, and being a playground for innovation

Puneet Chhatwal, the managing director and chief executive officer of Indian Hotels Co. Ltd (IHCL), which owns hospitality brands like the Taj, SeleQtions, Ginger, Vivanta and ãma Stays & Trails. (Illustration by Priya Kuriyan)
Puneet Chhatwal, the managing director and chief executive officer of Indian Hotels Co. Ltd (IHCL), which owns hospitality brands like the Taj, SeleQtions, Ginger, Vivanta and ãma Stays & Trails. (Illustration by Priya Kuriyan)

It’s a bright, sunny day as the Capital enjoys a brief interlude from rain. From the boardroom at The Chambers—a members-only club at the Taj Mahal, New Delhi, on Mansingh Road—Lutyens’ Delhi looks lush green. I am there to meet Puneet Chhatwal, the managing director and chief executive officer of Indian Hotels Co. Ltd (IHCL), which owns hospitality brands like the Taj, SeleQtions, Ginger, Vivanta and ãma Stays & Trails.

This is turning out to be quite a landmark year for the company, with the Taj having been ranked as India’s strongest brand for the third time by Brand Finance, a company that assesses brand strength. Eight Taj hotels, among them the Rambagh Palace, Jaipur, Taj Falaknuma Palace, Hyderabad, The Taj Mahal Palace, Mumbai, and Taj Holiday Village Resort and Spa, Goa, have been featured in French ranking and restaurants guide La Liste’s World’s Best Hotels 2023 (top 1,000) list. Meanwhile, newer hotels and home-stays are opening up under each of its five brands across cities.

However, Chhatwal is not resting on his laurels. He has already outlined a vision for 2025: a portfolio of 300 hotels. “We are just 30 short of that right now,” says the 59-year-old.

When Chhatwal joined IHCL in 2017, after a long stint in Europe and North America, one of his first measures was to better define the sense of “Tajness”, or the core values of the group. Describing it as the DNA of the company, he explains: “It has evolved over 120 years. But five years back, we really tried to define it as ‘trust’, ‘awareness’ and ‘joy’. What was initially launched as a luxury ritual service—the way we welcomed guests—evolved into a cultural transformation of the way we conduct ourselves. We have good examples of ‘Tajness’ taking place on a daily basis, which are shared on our Intranet. This is not a drill, but a way of being," he says. 

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Chhatwal’s focus now is on marrying hospitality with profitability without compromising on the core values. When he joined the company, it had been suffering losses for seven years. In 2017-18, though, it reported a profit of 101 crore, following it up with robust profits in the next two years as well.

But then came the pandemic that brought all travel to a standstill. Hotels simply fell silent. The buzz returned last year as people who had been cooped up for two years began spending on more frequent getaways from the city, even if it was a staycation or a short trip. Today, hotels and resorts, across categories, are humming even during the “off-season”. IHCL too has bounced back quickly. The group, which has 34,000-plus associates (their term for employees), ended the first quarter of FY24 with a turnover of over 1,500 crore and double-digit revenue growth. 
 
That is where Chhatwal’s success lies— in creating a strong diversified brandscape that caters to different needs and expectations. Today, the focus, apart from the luxury Taj brand, is on re-imagining the Vivanta and Ginger hotels while maintaining a balance between owned and leased properties, which is now a 50:50 between the two. 

Chhatwal says their evolving offerings mirror the growth of India from a developing nation to the world’s fifth largest economy. “And as the nation aspires to be No.3, hotels too have to change the way they are perceived. They are not just positioned as a luxury offering but a service that addresses all customer needs. I think IHCL did a great job of thinking ahead of time by diversifying into brands like Vivanta and Ginger,” he says.

The IHCL portfolio stands at 270 hotels currently, including 80 under development: Taj (101), SeleQtions (34), Vivanta (49) and Ginger (86). Each offers different price points and styles of service. So, if Taj is a hallmark of the company’s 120-year-old legacy of classic hospitality, Vivanta is a more sophisticated and contemporary upscale hotel. Ginger, conceived as budget hotels in tier 2 and 3 cities, is transitioning to the lean luxe segment. amã Stays & Trails offers a luxury home-stay experience.

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SeleQtions, launched in 2019, is positioned as a platform where each partnering property can retain its individual identity. The 12 hotels in the first phase were from the group’s own stable, such as the President, Mumbai, Ambassador and The Connaught, both in Delhi, and Devi Ratn, Jaipur. It now has partnerships with stand-alone hotels reflecting the brand ethos, like Leisure Hotels’ The Pilibhit House in Haridwar,  Uttarakhand.

“SeleQtions would be an upscale or upper upscale hotel; however, anything above that—call it luxury and iconic—would be Taj. Meanwhile, Vivanta is now a sophisticated urban hotel. Ginger is transitioning from budget to lean luxury. Around 50-60% of the portfolio has transitioned already and the rest will follow,” explains Chhatwal.

A lot of hotels, such as Fort Aguada in Goa and Fisherman's Cove, Chennai, which were earlier called the Taj, had been rebranded as Vivanta in the past decade. However, now, they have been renovated and upgraded back to Taj. At any given point of time, in each of these brands, you will find five to six hotels in the process of transitioning or evolving. Chhatwal calls it normal for a company that is 120 years old, with some hotels that date back to 60 years. “Look at the Taj Mahal, New Delhi, where we are sitting today. The renovation is 95 per cent complete. Right now one shop in the lobby area is left to be done and a new wine bar is coming up where Wasabi used to be. The hotel has been in a transition phase for the past 2.5-3 years,” he says. “It is important for the management to make the right decisions for today and tomorrow.” 

Among the new deals the group has signed this year is one for a 400-room hotel in Delhi and a 120-room hotel in Kochi, Kerala, even as it enters new markets like Raichak in West Bengal and Dhaka in Bangladesh. Today, it is present in 125 locations within the country—from urban centres such as Mumbai and Kolkata to the snowy reaches of Manali and pilgrimage centres like Rishikesh and Haridwar.

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 As hotels open up in Jammu and Tirupati, Andhra Pradesh, Chhatwal believes there is nothing more resilient than spiritual tourism. “The government is also focusing on infrastructure in these places. That is the best thing that could have happened for the hotel business as newer highways, airports and the renaissance of train stations will drive travel, which in turn will spur hospitality,” he says.

He believes all companies have three kinds of culture—family, machine and playground. Playground is for innovation, machine for production, family is community. “We have a good combination of the three: 50% is family; 25% is machine as we are catering to events, weddings, hosting G20 events, conferences, and more. But we are also a playground for innovation and that is very important,” says Chhatwal, who comes across as candid and forthright, while firm on keeping his personal life just that—personal.

 One example of innovation is Qmin, launched at Tata Sons chairman N. Chandrasekaran’s suggestion during the pandemic as a safe way of bringing the group’s restaurants to your home. Spread across 25 cities today, “it has a cumulative gross merchandise value of 170crore since inception and has never lost money”, he says. While this service will continue, they are now working on the “Qminisation of Ginger”. All-day dining at Ginger hotels will be known as Qmin; 22 of the 59 operational hotels have already migrated to this format.

 When Chhatwal joined the group in November 2017, he brought with him nearly four decades of experience in Europe and North America—he had been the chief executive officer and member of the board of Steigenberger Hotels AG–Deutsche Hospitality and served as the chief development officer at the Rezidor Hotel Group–Carlson Hotels Worldwide.

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He defines his leadership mantra as “a combination of American marketing, European management and Asian emotional intelligence”.

“Europe has wonderful social systems. It’s amazing how they balance the high cost structure with a high standard of living in a multicultural set-up. Meanwhile, the Americans have succeeded in creating brands that travel well across the world. And the emotional intelligence of Asians is par excellence. A lot of work gets done on the basis of the relationships that you forge, and these go beyond the job and title. You will notice a significant impact if you bring these three key learnings into a management philosophy,” he says.

Chhatwal, known for his attention to detail and his ability to multitask, is a graduate of both Delhi University and the Institute of Hotel Management, Delhi, who started as a trainee with The Ashok in Delhi. Between the ages of 20-25, he gained exposure to events such as the Asian Games, the 7th Summit of the Non-Aligned Movement and the Commonwealth Heads of Government Meet. “At that time you didn’t have fancy machines to churn out cappuccinos and latte. One needed to know the basics. There was a lot of science behind the art of hospitality,” he reminisces.

Keen to pick up skills in the “real world”, Chhatwal had heard European hotels were the best when it came to skilling employees. He started learning both French and German, one in the morning, one in the evening, before heading to ESSEC, Paris, for an MBA in hospitality and an advanced management programme at INSEAD, also in France.

His first assignment in Europe, after the fall of the Berlin Wall in 1989, was a tough one—asset management of the financially struggling Interhotel, the East German government chain. In 2012, Chhatwal took over as CEO of Steigenberger Hotels AG–Deutsche Hospitality. “It was an industry first for a person of Indian origin to be heading a German hotel company,” he says.

Five years later, he returned to lead India’s oldest hospitality brand, inspired by his meeting with Chandrasekaran. As he looks back now—having opened 70 hotels in 50 countries—, he realises that every phase of his life has held a key learning. He particularly credits his stints in Scandinavia for inculcating a progressive vision for hospitality. “Today, we are talking about an integrated annual business report. That was a requirement in Scandinavia 20 years ago. Having women on the board was mandatory decades ago. That is why the region is way ahead. I came back to India as I was born and raised here, and never lost the emotional connect. But I made sure to bring all these learnings with me,” he adds. 

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Looking to the future, he says, “The government is now spotlighting what were earlier considered remote areas and are now being hailed as high growth areas—such as the North-Eastern states.” The group has announced 20-25 hotels in the region. “A Taj hotel will open in Gangtok and later this year, Vivanta will launch in Tawang, Arunachal Pradesh. The Vivanta in Guwahati will be upgraded to a Taj. We might do a golf resort in Assam, centred around tea tourism. A Ginger hotel will open in Jorhat,” he says. IHCL is hoping to have a Ginger hotel in every state capital or district capital, with Ahvaan 2025 setting a target of 125 hotels.

Taj is also looking at select global outposts—the company has just signed deals in Dhaka and Riyadh. Dubai already has three Taj hotels, a fourth is under development. “It is important for us to have comprehensive brand management, or a strong brandscape. As custodians of Indian hospitality, we need to be at the forefront of India’s growth story and take forward the group’s philosophy of nation- building,” says Chhatwal.

The company is also amping up its food and beverage programme. When he joined IHCL, he realised that no one was looking at the F&B brands as businesses. The team made a decision to take existing successful brands to different outposts. So, House of Ming opened in London, while Shamiana of Taj Mumbai also made its presence felt at Taj Jumeirah, Dubai. Machan, the all-day dining eatery at the Taj Mahal, New Delhi, has reached Taj Westend in Bengaluru. “A lot of cross-pollination is taking place. We reimagined Chambers across two floors in Delhi. Today, it has presence across seven marquee Taj hotels in six cities including Dubai, and will soon have its presence in London and Bengaluru. We are exploring possibilities in New York, but still have to get permission,” he elaborates. Bombay Brasserie, which has been a popular restaurant in London for ages, has opened in Dubai as well. In a first, the company has signed the contract to launch a standalone outpost of Bombay Brasserie in Singapore, where it doesn’t have a hotel yet. 

IHCL has seen many challenges in the past, from the 2008 economic slowdown and 26/11 terrorist attacks in Mumbai to the covid-19 pandemic. Chhatwal attributes the brand’s resilience to a strong culture. “You can change your business strategy every three years,” he says. “But you can’t change your core values.” 

 

 

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