Indian Hotels was definitely not letting the property without a fight. After all, the iconic Taj Mansingh has been with the group since 1978 when the lease first came its way. After the lease expired in 2011, the iconic property has been in the midst of court cases accompanied by inevitable political intrigue and twists, with Indian Hotels seeking to extend the license nine times. At the end of it, the Tata Group-owned company eventually won the 33-year lease agreement for the 292-room property outbidding ITC. Iconic properties are the crown jewels for any hotel chain. No wonder then it was willing to pay the New Delhi Municipal Corporation a license fee of Rs.70.3 million per month as against Rs.39.4 million that it was paying earlier.
Indian Hotels boasts of more than a handful of iconic hotels in their portfolio — The Taj Mahal at Mumbai, The Connemera in Chennai, The Umaid Bhawan in Jodhpur and Rambagh Palace in Jaipur. To be sure not all of them are equally profitable. For instance, Taj Mansingh brings in a revenue of Rs.2.2 billion, with an Ebitda margin of 20%. In contrast, the Taj Mahal generates a revenue of around Rs.4.5 billion with an Ebidta margin of 40%. While the Taj Mahal is a larger property, there is a significant difference in margins. After the hike in license fees, analysts expect Taj Mansingh to make an Ebitda of about Rs.250 million. With the occupancy in the capital’s hotels at 70% — the highest ever in eight years — analysts expect the planned renovation at the hotel to bring in higher room rates and revenues.
A lot will be riding on the history of the property, a 32-room property originally home to Fonseca’s, which was brought down to make way for the Taj Mahal Hotel. Its opening in 1978 had a fashion show with Yves Saint Laurent displaying his line of clothes. By the early '80s, it came to be addressed by the city’s residents as Taj Mansingh after the road on which the property is located. Its marquee guest list includes international musicians, sportsmen and leading businessmen, with individuals such as billionaire NRI, Dadi Balsara having stayed there for 36 years. Stories of how Rolling Stones’ Mick Jagger checked in without a fuss to watch a cricket match in the 1980s or George Harrison of the Beatles walking into the hotel casually after his spiritual tour of Rishikesh adorn the walls of this iconic property, as it slowly gets ready for the next phase of its journey.