Chairman Natarajan Chandrasekaran conducted the first-ever digital annual general meeting (AGM) of the group’s oldest company, Taj Group of Hotels (IHCL), with independent directors and others participating from the comfort of their home. He answered shareholders’ queries, grievances and, in some instances, acknowledged flattering commentary for the management team.
"In the past few months, the outbreak of the Covid-19 pandemic has developed rapidly into a global crises, resulting in an unfamiliar and uncertain terrain and affecting the very fundamentals of the world around us," said Chandrasekaran.
The Indian economy had slowed on account of the NBFC decline, of credit growth, and the slowdown in manufacturing, but the onset of Covid-19 has seriously impacted the Indian economy, he said.
To that effect, he said, even as 2020 may see a contraction in the Indian economy to the tune of 3-5 per cent, IHCL was hopeful of a demand recovery in 2021.
“Effectively managing our assets through sale of non-core assets and re-negotiation of contracts with its owners to arrive at win-win solutions can help release cash and further reduce expenses ,” he said at the 119th AGM, adding, “Last but not the least, being thrifty and financially prudent is paramount for the company to survive through this crisis in order to revive its business and thrive in a post-Covid world."
He went on to add that travel and tourism created jobs, drove exports, and added 8 per cent jobs in the country.
However, the hospitality sector has also come under severe pressure as a result of lockdowns, reduced air travel, and absence of public gatherings which contribute to the MICE (meetings, incentives, conferences, and exhibitions) business.
IHCL has a 200-hotel portfolio with 25,000 rooms and 27,594 employees. Of this, 158 hotels are operational, and 42 in stages of development. The company signed 29 new hotels and had the opening of 12 hotels in the financial year, which include the Taj Fateh Prakash Palace in Udaipur, Cidade de Goa and Taj Hotel & Convention Centre in Goa, and Taj JLT in Dubai.
The future strategy will hinge on the sales of non-core assets, being financially prudent, and reviving the business, but there is no expectation for business to be led by inbound foreign tourism.
“While 2020 will see contraction in the Indian economy, demand is expected to bounce back in 2021, with domestic expected to play a strong role in the near term,” Chandrasekaran told shareholders.
During the two and a half hour AGM, Chandrasekaran also went on to detail how the company's visibility was limited, thanks to the pandemic, but was open to examining new revenue opportunities.
These include IHCL's newly launched food delivery app Qmin, repurposing the chambers club in the near future and more, he said, adding the Ginger brand would treble in volume in the next three years, while the SeaRock Hotel negotiations in Bandra were complete and would be wrapped up before the year end.
IHCL has launched a five-pronged strategy called RESET 2020 to reset itself and rebound strongly in a post-Covid world.
RESET stands for Revenue growth, Excellence in operations, Spend optimisation, Effective asset management, and Thrift.