With burgeoning profits and a slew of new acquisitions in the pipeline, The Indian Hotels Company Limited is scaling new heights under Puneet Chhatwal
With the rising number of hotels jostling for patrons’ attention, the hospitality industry in India is becoming increasingly competitive. However, there have been a number of hotel groups that have made a lasting impression on the minds of consumers. Taj-Hotels owned by The Indian Hotels Company Limited (IHCL), is one such group that has earned the rightful reputation of being Asia’s most luxurious and finest groups.
In 2017, the company appointed Puneet Chhatwal, the ex-CEO of Steigenberger Hotels AG, as its Chief Executive Officer. Under his leadership, the company has delivered a stellar performance with improved profitability and a healthy rate of growth. It has reported a profit after tax of Rs101 crore and declared 40 percent dividend for the financial year, 2017-18. Based on the company’s overall performance, compliance with industry norms, its market capitalisation and liquidity, it was given the award of “Best Hospitality Corporate Governance in India,” by CFI.Co.
Today’s Traveller caught up with this dynamic leader, who spoke at length on being ambitious, coping with the work culture in India, and taking the company forward.
On Drive and Ambition
Chhatwal ascribes his success to four distinct qualities: his desire to move out of the middle class, his refusal to accept the status quo, his obsession with being the best in his chosen field of work, and his zeal to keep on moving, despite failures. Born and brought up in a Punjabi family in Delhi, Chhatwal attended the Delhi Public School, before pursuing a degree in Hotel Management at IHM, and then a Master’s degree in Hotel Administration from ESSEC Business School in France. He has held a variety of top positions in hotel chains across Europe. His last stint was at Deutsche Hospitality Group – formerly known as Steigenberger Hotels – where he oversaw the Group’s expansion into Egypt, the Middle East, Spain, Benelux and China.
Chhatwal says that even on his way up the corporate ladder, he has always chosen to speak his mind. He is keenly aware of the fact that his outspokenness may not be appreciated everywhere. So, he suggests astuteness to understand where candour would work and where it wouldn’t. In his inimitable style, he says, “Speaking the truth may or may not work for every culture. So, you have to have the sense of not to try to change everything. At the end of the day, you have to see what works in a certain situation and what doesn’t. But, don’t accept what is wrong. Improve whatever can be improved. Change what can be changed as long as it is meaningful and creates value for all stakeholders.”
On Work Culture in India
For a person who has worked in Europe for so long, coping up with the diverse work culture in India must be difficult. He says that work culture in IHCL is good, so he feels blessed. However, there are a couple of things which India could improve upon.
Chhatwal continues, “Historically, India has been known for its competitive spirit. From Kindergarten to college to jobs, Indians are taught to compete with one another rather than collaborate.” Chhatwal further adds, “It would be more beneficial if a culture of collaboration was imbibed.” However, Chhatwal rushes to add that not everything in western countries is good either. In Germany, for instance, corporate organisations have a tendency to sit on a project for years. This, says Chhatwal, can be frustrating. He concludes, “A combination of a European style of management, American skills in marketing, and emotional intelligence of Indians is a winning formula for business.”
On Brand Taj
Chhatwal is keenly aware of the brand value that the Taj exudes. People associate with the brand Taj emotionally. However, the ambitious CEO is not going to rest easy. He says. “Just iconic is not good enough. One also needs to be profitable.” “Being the best in class does not mean simply the best in service,” he explains, “It also means that you have the ability to charge your customers and they are willing to pay for the service. That, minus the cost to service, creates a healthy profit margin for all stakeholders.”
Chhatwal has ambitious plans for the future. He has unveiled the Aspiration 2022 programme, which includes being the dominant player in the luxury hospitality segment, expand globally, and registering a healthy profit margin, all of which would enable them to invest back into the company.
On Challenges ahead
The conversation shifts to the bidding process to acquire a new property in India, Chhatwal says that the lack of proper rules makes the bidding process difficult in the country. Abroad, this is not the case. Mature markets of the UK and US have a couple of criteria on which they judge a suitable bidder. These include a detailed description of the leased property and the brand name which is leasing out the property.
“If a ‘triple A’ company bids for a lease property, the leasor would prefer it over another company, even if the company happens to pay a lesser amount of rent. This is not the case with India,” says Chhatwal. Also, the labour laws in the country need an overhaul. In advanced countries, a new company, Chhatwal says, has to take over the existing employees. But this is not the case with this country either.” But, Chhatwal is still upbeat. He foresees a future in which the hospitality market in India will flourish, and IHCL will be the most important player in the field.