Emerging Markets : ITC Builds Hotels

COMPANY TO WATCH: ITC/INDIA

 

 

Kolkata-based ITC, or India Tobacco, is building luxury hotels as fast as it can to take advantage of a tourism boom and to diversify its operations. Non-cigarette businesses now account for more than half of the company’s revenue.

The cigarette industry in India is operating in a climate of rapidly escalating restrictions on consumer and marketing freedoms, ITC says. It expects its future drivers of growth to be in agricultural commodities and hotels. ITC’s packaged foods, garments, paperboard and papers businesses all are growing strongly.

The company’s hotel business reported 37% growth in revpar, or revenue per available room, in the fourth quarter of 2006. Overseas tourist arrivals in India rose 13% in 2006, and ITC is the country’s second-largest hotel operator.

ITC has 60 hotels in India, with a total of 3,278 rooms. It is building a luxury hotel in Bangalore and a resort at its golf course near Gurgaon, on the outskirts of New Delhi. ITC also has purchased land in Madras and has obtained approvals for a new property at Chennai.

Meanwhile, Japan-based Marubeni recently agreed to a comprehensive affiliation with ITC, with foodstuffs as the principal area of business. The agreement could be extended to chemicals and apparel.



Gordon Platt
 

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