Dubai: Tata Group’s Indian Hotels Company Limited (IHCL) is taking an ambitious approach to its UAE and GCC expansion, avoiding a blanket footprint in favour of strategic locations. Under the leadership of CEO and Managing Director Puneet Chhatwal, IHCL—operator of the Taj, Vivanta, and The Gateway brands—is targeting markets with a strong Indian diaspora, solid airline connectivity, and status as key trade hubs, aligning its growth with focused demand drivers.
According to Saurabh Tiwari, Area Director of Middle East and CIS hotels, ICHL, the UAE and the broader GCC market alone are primed for more Taj hotels, including “an upper upscale Vivanta brand, Gateway (IHCL’s chain of midscale hotels), and the new Ginger brand of hotels.” Currently, the hospitality group has seven hotels in the Middle East, with four under development.
Although Tiwari did not provide timelines, he said the company is keen on opening the luxury model Taj properties in Abu Dhabi, Ras Al Khaimah, Ajman, and Sharjah in the UAE. “Abu Dhabi can have at least one Taj hotel, a resort in Yas Island. Dubai can have at least two to three more hotels, including a Taj Vivanta. We should have a hotel in Ajman, and Sharjah, which are very underestimated markets. Sharjah has a cricket stadium, making it a huge potential for sports tourism,” he said. The UAE has three Taj hotels – the 296-room Taj Dubai in Business Bay, the 325-room Taj Exotica Resort & Spa and the 200-room Taj JLT.
Founded in 1899, IHCL has a global portfolio of 309 hotels, including 91 under development, across 4 continents, 11 countries, and over 100 locations.
Regional expansion
Tiwari said the company is well-placed to enter Doha, Muscat, and Kuwait City in the GCC. The group has ambitious dreams for Saudi Arabia, and in 2022, it announced its 250th property in Saudi Arabia—the second in the Kingdom. The Taj-branded hotel was launched in partnership with the Diriyah Gate Development Authority (DGDA).
“Two is a good start in Saudi Arabia; however, we could have one more in Riyadh. AlKhobar is something that excites me as well. I would aim for five properties in Saudi Arabia in time for Neom City’s first phase launch,” Tiwari added.
In August, IHCL launched two new hotels under the Taj brand in Bahrain – the Taj resort, a 251-room hotel in Hamala and a 200-room Taj Hotel in Downtown Seef Manama. These greenfield projects are an important milestone for the group, making IHCL the first Indian hospitality company to establish a presence in Bahrain. And according to Tiwari, more are coming. “The Middle East is strategically important to our growth plans,” he said.
Scaling strategy
Tata Group’s Indian Hotels Company Limited (IHCL) is aligning its expansion strategy with growing airline connectivity, a key factor in choosing new hotel destinations, according to Tiwari. He emphasized the importance of Air India’s expanding network, which has been rapidly growing since its re-acquisition by Tata in 2022. “Air India has changed the game recently with multiple direct flights from US cities like New York, leading to a surge in American tourism,” Tiwari said.
Recruitment plans
IHCL employs around 1,000 staff in the UAE, swelling to 1,200 during peak winter seasons. Over the next three years, the group expects to hire up to 4,000 more employees across Bahrain, Saudi Arabia, and the UAE.
“With each new hotel launch, we anticipate adding 300-400 employees per property, depending on size. For example, a 600-room property could bring an additional 600-800 employees, following the 1:1.5 staff-to-room ratio,” said Tiwari.
Will hotel rates rise?
Looking ahead, IHCL is optimistic about Q4. Despite increased competition, it aims to match last year’s 85 per cent occupancy rate.
“New hotels are adding thousands of room nights nearby, but we’re comfortable maintaining last year’s numbers given the market conditions,” said Tiwari. With new hotels entering the market, matching that level of success in 2024 will be a challenge. “We’re not predicting an economic or tourism downturn, but the sheer volume of new properties will impact the balance of supply and demand,” he added.
In prime areas like Business Bay, average daily rates hover around Dh900, properties like Taj Exotica command rates between Dh650 and Dh1,400, and Taj JLT rates are D700.
Geopolitical headwinds
Despite steady performance, Tiwari acknowledged that geopolitical tensions have hampered growth. “We could have done significantly better without the ongoing conflicts. War impacts everyone, no matter the side,” said Tiwari.
While Dubai’s hospitality sector has shown resilience, with occupancies rebounding quickly after initial dips caused by global events, IHCL stresses that overall business would have been more substantial in a more stable environment. “Though an influx of Russian businesses has provided some lift, the broader impact of geopolitical instability has been negative,” he added.
