Mumbai-based Indian Hotels Company (IHCL), a subsidiary of the Tata Group, which owns the Taj Group of hotels, has been busy this year. In July, it sold off shares of Belmond for approximately $11.96 million and sold the Taj Boston hotel for $125 million. The property—one of three the group owned in the U.S.—was acquired 10 years ago for $166 million.
With these challenges in the past, the company is now working on a rebranding strategy that could see the Vivanta and Gateway budget brands come under the Taj umbrella. All of the properties would be rebranded as Taj Palaces, Taj Resorts & Spas, Taj Safaris and Taj Hotels.
Earlier this week, Rakesh Sarna, MD and CEO of IHCL, outlined the proposal to the general managers of several Taj hotels. A source close to the development told the Indian Express that “the CEO wants a position where even if they are present in a small space, the brand will command that space…There is a feeling within the company that customers come to Taj hotels for that brand and they do not like to be associated with another name.” This is in direct contrast to the large companies with multiple brands—including Marriott, which now has 30 brands in its portfolio following last month’s acquisition of Starwood.
But while the rebranding efforts would boost the Taj name, they would also present some challenges to the company. All of the smaller hotels would have to be upgraded and brand standards would have to become uniform across all properties, which would not likely be inexpensive. On the other hand, while bringing all of the hotels under one brand could require “a significant investment” by the company, it also help IHCL charge a higher premium on the pricing across all the hotels, the source suggested.