IHCL to Scale Atmantan to 5 Properties in 5 Yrs, Says MD & CEO Puneet Chhatwal

See, Atmantan is a profitable venture, it's not loss-making. It's been making money and the operating profit was close to 50% of the revenue. Depending on how things evolve in the next few years, if there is a geopolitical impact, normally Atmantan should benefit instead of suffer. But still, there could be other issues that come in which are beyond our reasonable control. The people, the management—we feel that this is a very sound investment.

So, firstly, it is a sound investment—why? Because it's not leveraged. It's a brand which is very, very special. If you look at the IHCL brandscape, we were missing a brand which represents—besides Indian Hotels Company, which was founded by Jamshedji Tata, with Taj as the crown—with the exception of Ama, we wanted a very pure Indian name. And this name, Atmantan, is really something which symbolizes India's cultural heritage, India's spiritual heritage, and the latest movement around healing in India.

So, we have to look at this not only as one property acquired, but as a platform for wellness which can be scaled up—not significantly, but let's say 4 to 5 properties in India in the next 5 years, and maybe even exported to the world, either by getting people to come here and experience it or, if there is a right opportunity, taking it outside. Already, a lot of foreigners and westerners come here, which at the moment is down because of the conflict in the Middle East (West Asia). I personally believe very strongly in the soft power of Brand India, which is yet to be fully tapped, and that soft power can only come when India has brands with global recognition. Taj has that global recognition—and can Atmantan get that global recognition in a few years from now? Yes, for sure it can. So, it has the potential.

That's how we have thought about it, and it also completes our brandscape. Today, if you look at it—from ultra-luxury, which is the palaces and the living legacies of Taj, to the safaris, to other Taj business and leisure hotels, all the way to homestays with Ama or Ginger—we have covered the complete spectrum. There was only one empty spot, and that was wellness hospitality, or integrated wellness hospitality, and Atmantan fills that gap.

J Wellness Circle is a spa—a spa within a hotel, which is perhaps one-five-hundredth the size of Atmantan. A typical spa in Delhi's Taj Mahal Maan Singh or Taj Palace is around 250-300 square meters. Atmantan is 42 acres of land, and the whole concept is built entirely around wellness. So, that's a very different thing from a simple spa.

Can Atmantan complement J Wellness Circle? It definitely can. But J Wellness Circle cannot complement Atmantan. So, there is no brand cannibalization at all—they are two completely different spaces. One supports spas within hotels, which is a smaller setup that guests need whether it's a steam room, sauna, gym, or a few massage rooms. The other is the whole concept of integrated wellness and a holistic way of life, which J Wellness Circle doesn't offer. J Wellness Circle already has 75 plus locations, and if you include what we broadly call spas, there are more than 100 across our portfolio.

I don't think in my lifetime we will have 100 Atmantans. If we get to 10, that's already very good. And that itself tells you the kind of investment, the kind of opportunity, the kind of land, and the kind of infrastructure needed to build a brand like this.

Accelerate 2030 has several pillars, and Atmantan is not really a key driver of that strategy. It does not come in the way—it complements it.

Where Atmantan fits in is, as I said, as a brand and a new vertical within our company, one that ventures into wellness together with the founders. And that's why this is not an outright purchase—we've kept the founders in because they understand this business.

One component to note is that we have guided a return on capital employed of 20% under Accelerate 2030. We said we'll have 700 hotels, but we did not say we'll have 7 wellness centers under Atmantan. That said, acquisitions like this, at a forward-looking multiple of 11 to 12 times EBITDA, are likely to improve further as years go by, and will contribute towards that return on capital employed. But the main driver of Accelerate 2030, it is not.

When we make strategies and execute them, it's years of work. You don't acquire something in 2026 and expect it to fully contribute by 2030. The acquisition that does drive Accelerate 2030 is ANK, Pride and Brij hotels—which will help us scale the Ginger portfolio to 250 hotels by the end of this financial year. Our own Ginger properties, combined with the ANK and Pride hotels once converted to Ginger, will together reach 250 hotels by 31st March 2027. That is what drives Accelerate 2030.

Atmantan is more of a new piece—a new vertical in our brandscape—which we hope to evolve over time. When we announce our next strategy, we will give proper guidance on what Atmantan looks like going forward. We may even add it as a complement to 2030 in a year from now. But today, it would be premature, as we are still absorbing the acquisition.

The names you mentioned are all great, and they are great colleagues of ours. But we are comparing 123 years of hospitality and 157 years of the Tata Group with individual, standalone operations.

With all humility and my feet firmly on the ground, I believe what the larger ecosystem of Indian Hotels, with Taj as its flagship—the only brand from India that has truly gone global—can do, should not be compared to anyone else.

Having said that, both the names you mentioned are highly respected and are market leaders today. But we must also respect two young entrepreneurs, a husband and wife, who created something remarkable from nothing.

Now, the real movie begins—what we've seen so far was just the trailer. The movie starts now, in the sense that when this management team gets access to the complete power of a $10 billion, ₹1 lakh crore market cap company—with all its customer base, its loyalty base, and the belonging that comes with being part of the Tata Group—what magic can happen, time will tell. I think we are very well positioned to make that magic happen. And through our own experience in hospitality, we will also bring improvements within Atmantan that will take it to a much higher level.

If you go back the last 5 years, the highest number of signings and openings has been Indian Hotels. Hotelier publishes this data every year, and last year's data will be out very shortly—but we have consistently led on both signings and openings.

Today, we have the highest number of hotels both in operation and in pipeline. We have 375 properties in operation and 255 in various stages of development and construction, taking the total to around 625-630, against a goal of 700. Others are announcing they will get to certain numbers in 5, 10, or 15 years. That is the announcement they make.

We don't have to defend. We lead. And we lead by example. We are not in a defensive position—every move we have made has been an innovation that has redefined the hospitality landscape in India.

Never before had any hospitality company ventured into homestays. Never before had hospitality companies gone into home delivery or quick service restaurants. Never before had traditional Indian hospitality companies put so much focus on the mid-market segment the way we have with Ginger.

Just our Ginger brand alone will be 250 hotels—not in 5 years, but next year.

There are various sources of growth. The first is like-for-like growth—hotels that were already part of the system and grow their revenue year on year, such as Taj Mahal Palace or Taj Man Singh in Delhi. The second is new businesses—Tree of Life, Qmin, Ama, and the reimagined Ginger. The third is asset management initiatives, where you optimally utilize assets that already belong to you. And the fourth is gaining market share. All four are important.

Because we already have a large and strong base, like-for-like growth typically accounts for around 75 to 80% of our overall growth, with the remaining 20% coming from asset management, new businesses, management fees, the flight kitchen business, and so on—all of which is disclosed in detail in our quarterly results.

As for Atmantan, it already contributed in February and March, and from April onwards it will contribute for the full quarter—and it will contribute positively.

Tourism is one of the largest opportunities India has—a sleeping beauty, if you will. And it would be fair to say that not much has happened on this front directly.

Announcements are welcome, but let me start with the biggest positive. The last 5-7 years have seen significant infrastructure investment in India—roadworks, the renaissance of railway stations, and a doubling of the number of airports—which creates the connectivity needed to build tourism. So tourism is not a direct beneficiary, but an indirect one. Tourism, hospitality, airline catering, and airlines themselves all benefit from this infrastructure investment. Some of the recent announcements will further boost tourism, and those are very positive.

However, my recommendation—across various platforms that I chair, including the National Council of Tourism and Hospitality at CII and FAITH, which is the apex body of all tourism and hospitality associations—has always been around three specific asks.

The first is infrastructure status for the sector in full form. It was changed 12 years ago, possibly based on a population census from 20 years prior. Infrastructure status enables smaller and mid-level players to borrow at marginally cheaper rates and benefit from repayment relaxations during the gestation period, given that this is a capital and labour-intensive sector. There was no reason to take it away, and there is no reason we should be treated differently.

The second is industry status at the state level. Some states have granted it, but execution has not yet happened. Industry status helps with competitive utility costs, because hotels have historically been among the highest taxed and highest levied sectors in terms of duties, utilities, property taxes, and so on.

The third ask—which has now become perhaps the most fundamental—is tourism marketing. The budget for marketing destination India to the world through the tourism ministry has been brought down by 90% and is now effectively zero, barring mandatory fee commitments for participation in international events.

This matters enormously because since COVID, foreign tourist arrivals in India have either stagnated or gone backwards, even as our neighbouring countries have benefited significantly despite having far less to offer. Southeast Asia remains very strong in tourism. India talks about 10 million foreign tourist arrivals, but a large portion of those are diaspora visitors with foreign passports coming to meet family—not real tourists in the traditional sense. Just to put it in perspective, the city of Paris alone receives 25 million tourist arrivals every year—2.5 times all of India.

The current geopolitical situation adds further pressure—airfares have risen sharply, certain airspaces are closed, flying times have become longer, and there is a general hesitancy around flying over conflict zones. All of this is a dampener for India.

And there is a broader economic imperative here. We need to earn foreign exchange — a lot of foreign investment has gone out of India. We need to showcase Brand India: our culture, our colours, our unity in diversity, our landscapes that are second to none—from the finest mountain ranges to stunning coastlines both in the north and south, river tourism, business tourism, everything. As India grows in global importance, business visitors will increasingly want to extend their stays and explore. So there is a lot to showcase.

Domestic demand has been very encouraging, and we are pleased with that growth. But it would be good to get the fair share of foreign tourist arrivals that India rightly deserves.