At 100 in 3 years, IHCL arm eyes 500 luxury homestays by FY 2026 | Business Standard News*****

Clipped from: https://www.business-standard.com/article/companies/hospitality-player-ihcl-s-ama-stays-trails-grows-by-500-in-three-years-122123000781_1.html

Of the 61 operational properties which are all managed assets, around 21 properties are Tata company homes or bungalows

Indian Hotels Company

When Tata-owned hospitality player Indian Hotels Company (IHCL) first launched its sub-brand called ‘ama Stays & Trails’ in early 2019, it wasn’t entirely clear what the strategic intent was for a company that already runs palaces, boutique hotels, business hotels, and resort destinations. As a branded product in the homestay market, ama Stays & Trails was geared to be a collection of plantation bungalows, heritage villas, colonial houses, havelis, and quaint private residences in local markets. But what began as a journey with nine heritage bungalows has rapidly expanded to over 100 assets with 61 operational hotels and 43 under development.

Puneet Chhatwal, MD and CEO at IHCL, said: “Growth of ama Stays & Trails is evidence that the Indian hospitality scene is not only evolving as consumers opt for new formats in leisure hospitality but also harbouring massive potential in terms of untapped growth, that need to be discovered.”

So what drove the creation of the brand? Prabhat Verma, executive director at IHCL, said that the thinking behind the venture was a “Tata-synergy” story in order to streamline operations that included hospitality across the group. Tata Coffee was already handling a chain of nine heritage bungalows in Coorg and Chikkamagaluru, and it made strategic sense to hand the collection over to IHCL under a management contract, to run just like any other hotel.

Of the 61 operational properties which are all managed assets, around 21 properties are Tata company homes or bungalows. The structure of the arrangement allows IHCL to get about 18 per cent of the top-line from the asset owner, which is run like any typically managed hotel, Verma said. Industry-wide top-line commission figures generally can be as high as 21 per cent.

ama looks to expand to 500 properties by the financial year 2025-26, and the overarching strategy is to develop properties within driving distance of existing hotels to share management, resources, and costs, Verma said. “We have 11 ama’s in and around Goa, so the hub hotel could be Taj Exotica or Fort Aguada and could serve as the ‘support hotel’ for the homestay.” The hub hotel offers key supervisory resources that could include a horticulturist, chief security, housekeeper, and chief engineer who oversee the spoke hotel from time to time, free of cost. Internally there is also a structure that allows the hub hotel to have a share of the 18 per cent licence fees.

ama is one of several business engines that IHCL has been pushing for growth. By providing a platform for house owners to open up their homes to travellers, ama offers an opportunity to monetise an idle asset and convert it into a profit-making business managed by IHCL.

The others include Ginger (a midscale brand) whose number of properties is slated to grow from 85 to 125-plus; Qmin (a food delivery service) which will expand from 20 cities to 25 cities, and Chambers, which is targeting 3,000-plus members. Among other new initiatives IHCL is introducing/licensing are F&B brands, such as Seven Rivers Brewing Co and Paper Moon.

Verma said as many as 40 new assets were signed during the Covid period.

The homestays are in locations, such as Goa, Thiruvananthapuram, Alappuzha, Lonavala, Khadakwasla, Madh Island, Munnar, and Alibag, among others. ama homestays are at drivable distances from cities, and provide guests meals, dedicated in-house service staff with chefs offering local cuisine. The stays are pet-friendly homes, with high-speed Wi-Fi connectivity.

Villa Siolim in Goa is one of the homestays that has done “phenomenally well”. Verma said the model is to stay in the entire bungalow, not just one room and be able to bring in multiple guests, if required.

Competition comes in the form of Saffron Stays and Vista but IHCL operates a premium positioning and includes everything in its stays.

Occupancy is at around 50 to 55 per cent across the brand which is high compared to an industry average of about 35 per cent, Verma noted.

If there’s a challenge for the model, it could be tariffs between Rs 40,000 and Rs 50,000 a night which may be perceived as high for Indian travellers.

According to Verma, that was the perception in the beginning but customers realised that the offering allows as many as four or five or even more guests, which then translates into a value proposition that’s not out of line with a luxury hotel.

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