Taj Brings All Its Hotels Under Single Brand
Taj Hotels reclassifies hotels into four categories.
Less than seven years after launching the Vivanta brand and four years after inaugurating its first Gateway property, Indian Hotels Co Ltd. has decided to re-brand the two verticals and bring them back under the Taj Group brand.
All existing properties run by the Taj Group will now be classified under four categories -- Taj Hotels, Taj Palaces, Taj Resorts and Taj Safari. Only its budget chain, Ginger Hotels, will continue to be operated under the existing brand.
Analysts and brand consultants maintain that this entire exercise will have no impact on the company’s performance in the near term. They peg the benefit of reclassification seeping in only after five years, if at all.
Consultants also argue that the rebranding exercise by the hotel major won’t do much to change the perception in the mind of the consumer, which has been dented due to a drop in service quality.
Taj has to play catch-up with other competition. Taj is no longer synonymous with the word luxury, the way it was years ago. Oberoi Group (East India Hotels Ltd.) is the brand that now comes to mind in terms of luxury. The company will have to do a lot more than just re-branding themselves to really change its perception in the mind of the consumer.Arvind Singhal, Chairman Of Technopak Advisors
Devanghsu Dutta, chief executive officer at Third Eyesight, a retail and brand consultancy firm, is not so critical of the new strategy stating that the new branding will help Taj classify its properties better and build market share over a period of time.
Brokerage house IIFL Ltd. says Indian Hotels’ long-term strategy is to chase profitability over a period of time.
The earlier positioning didn’t do much for the consumer. There was a sense of ambiguity in the minds of the consumer with the earlier classification of hotels. It is very clear that the company is now looking to improve its bottom line.Amar Ambani, Head Of Research At IIFL Ltd.
The rebranding will be complete by the end of 2017, the company said.
Chinami Sharma, chief revenue officer of Taj Hotels, Palaces, Resorts, and Safaris, said the company will spend not more than three to four percent of its revenue on the rebranding exercise.
Indian Hotels’ consolidated revenue in the quarter ended December stood at Rs 1,129.29 crore, down 2.8 percent year-on-year compared to Rs 1,162.19 crore. Its net profit rose to Rs 93 crore compared to Rs 13 crore in the year-ago period.
The reclassification of hotels will not have an impact on the pricing strategy of the Taj Hotels properties, the company said.