DNA MONEY EXCLUSIVE: IHCL may scrap Gateway brand, merge hotels with Vivanta

After taking a U-turn on its mono brand strategy, the top brass of Tata Group's hospitality arm Indian Hotels Co Ltd (IHCL) is now considering scrapping the 'Gateway' hotel brand altogether. The hospitality chain, popularly known as 'Taj Hotels Palaces Resorts Safaris', is also planning to refresh its mid-scale chain of economy hotels under the Ginger brand owned and operated by wholly-owned subsidiary Roots Corporation Ltd (RCL).

Sources familiar with the development told DNA Money that the Gateway hotel brand is going in cold storage. "The Taj group is planning to discontinue the Gateway hotel brand. As a result of which majority of these (Gateway) hotels will be re-branded as Vivanta," said a source.

When contacted, IHCL did not respond to DNA Money queries.

Interestingly, Puneet Chhatwal, managing director and chief executive officer, IHCL, while speaking at Hotelivate's HICSA 2018 investment conference in Mumbai last week, completely skipped The Gateway Hotel brand while emphasising that Taj, Vivanta and Ginger will be driving Taj Group's portfolio in the future. Chhatwal also said that IHCL will consider expanding the residence space (akin to Taj Wellington Mews at Colaba) to tap the opportunities in this category of hospitality accommodation.

As far as Ginger is concerned, sources said that an Indian firm has been brought on board to do the re-positioning of the mid-scale/ economy brand while a German firm is being engaged to do the fresh design template. "The IHCL management is thinking on developing the upcoming Ginger hotel in Goa using the new design template," said sources.

On the possibility of Gateway branded hotels getting converted to Ginger, sources added, "There was some thought process on those lines earlier. However, to start with, it appears that the IHCL management will convert most of the Gateway hotels to Vivanta and not Ginger."

The Indian hospitality chain had, in February 2017, planned to transition all the 58 hotels under Vivanta (31 hotels) and Gateway (27 hotels) brands to a single identity i.e. Taj. However, the decision was reversed in February 2018 wherein Chhatwal chose to maintain status quo.

According to a May 2016 corporate presentation by IHCL for investors, the company had 32 Gateway branded hotels with 2,804 guestrooms while the Vivanta branded hotels and resorts had 40 hotels with 5,521 guestrooms. The number of Ginger hotels stood at 34 with approximately 3,170 guestrooms.

The mono brand approach, if pursued, would have led to a major correction in IHCL's hospitality footprint. In fact, a look at the company's website (www.tajhotels.com) clearly shows that the number of Vivanta branded hotels is down to 26 (from 31 in February 2017) as some hotels have been upgraded to Taj while a few others have gone out of the system.

The number of Gateway hotels, however, has declined to 25 hotels (from 27 in February 2017) despite addition of Pune hotel. It remains to be seen how IHCL will approach the soon-to-be opened Gateway branded hotels in Tirupati, Andhra Pradesh and Theog, Himachal Pradesh.

The number of Taj branded hotels have increased from 30 hotels (in May 2016) to 46 at present.